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?
We’re going to come up with a better definition of a contrarian trade that gives us a framework for analysis. In order to do that, it is helpful to look at the behavior of those accepted as charter members of the Contrarian Club. I nominate Doug Kass as a great example. I enjoy reading Kass’s […]
How many strategists and managers can be contrarian? Why does everyone want to be one? As with many principles, the basic idea is easiest to understand by looking at extremes. At market bottoms (or bottoms in specific stocks, commodities, etc.) no one wants to buy. This is a terrific opportunity because the selling is over. […]
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 […]
Here is a nice summary of current economic data and a thoughtful conclusion: Link: Incomes and Spending Healthy, Another Measure of Inflation Decelerates, Leading Indicators Point to Further Strength. – Personal Income for November rose .3% versus estimates of a .3% increase and a .5% gain in October. – Personal Spending for November rose .3% […]