More Overreaction in Energy Stocks

The higher volatility in these stocks makes no sense, but it comes with the territory.  Here’s the story, and I’ll explain more below. Link: Energy ETFs Leak Oil. Bloomberg reports that Crude oil fell on expectations that milder temperatures in the U.S. will help preserve stockpiles of winter heating fuels that are above average levels. […]

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Thinking clearly about the yield curve

Barry is like the farmer who thought the sun would no longer rise after his rooster died. He has observed a correlation and has inferred causation. The yield curve is an indicator of something, not a cause. Ask yourself this question: Would U.S. economic prospects be higher if Asian banks were less willing to buy our bonds?

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This Hedge Fund Strategy Ain’t Overcrowded

Everyone wants to be a contrarian.  Here is an interesting suggestion that a hedge fund can be contrary by selling stocks short.  The evidence here is not very convincing, since even those hedge funds that are not labeled as “short only” maintain substantial short positions and use leverage. But first, take a look at the […]

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