On February 19th, the S&P 500® closed at an all-time high of 3386; last night, exactly one month later it closed at 2409, a 29% decline from the high. Let’s take a moment to reflect on what’s happened over the last month. We should first start by putting the decline into historical context. The peak-to-trough…
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Volatility – it is sometimes said – takes the elevator up but takes the stairs down. Like seismic activity, volatility can rise precipitously, but tends to decay more slowly; aftershocks and tremors continue to roil markets after any major repricing occurs. The practical consequence is that, once the markets become volatile, they tend to remain…
“The more you look at ‘common knowledge’, the more you realise that it is more likely to be common than it is to be knowledge” – Idries Shah, Reflections Statements such as “sell in May and go away” can become accepted wisdom without always facing proper scrutiny. Another aphorism, particularly timely at the present moment, is…
News that the Dow broke through 25,000 yesterday was not universally celebrated. A market index achieved a specific numerical barrier — so what? The importance of such events is at best anecdotal, and their celebration in the media is increasingly regarded as humbug. Is there any truth – one might ask – to the theory…
In grid-iron football, The Red Zone refers to the area between the 25 yard line and the goal line, the last remaining ground the offense must battle through in order to score a touchdown. This is a somewhat apt metaphor for what we’re currently witnessing with the Dow Jones Industrial Average. Unless you’ve been living…
The Dow Jones Industrial Average ended 2016 at 19,762.60 – up 2.337.57 points for a 13.42% annual return, the best year since 2013 when the market surged over 26%. Biggest Themes – markets were driven by the crash (and partial recovery) in oil prices, Fed-watching, China, Brexit and questions regarding the US economy. Oh yeah,…
The Dow Jones Industrial Average ended September at 16,284.70 – down 1,538.37 points year to date for a -8.63% return. Q3 2015 was the worst calendar quarter since Q3 2011. Leader & Laggard – Nike (NKE) was the biggest contributor during Q3; Goldman Sachs (GS) was the biggest detractor. Industry Performance – the Consumer Goods…
As investors, we necessarily rely on history. How we analyse that history is particular to each investor – some will look for technical patterns, some at fundamental data, still others will build quantitative models. But all of us need data, and history is our only source. We may have to rely on history; we don’t…
On February 27, 2007… The Dow dropped 416 points. Freddie Mac announced it would no longer buy subprime loans that have a “high likelihood” of borrowers not meeting monthly payments. The VIX rose over 7 points that day. It’s been above 11.15 ever since. Until about an hour ago.
This morning (September 10th) S&P Dow Jones Indices announced three deletions and additions for the Dow Jones Industrial Average. This post explains why we made these changes. The press release is on www.spdji.com The Dow is price weighted – each stock’s weight is the ratio of its price to the total of the prices of…
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