Data Diary

Basic principle is that the index is “an average that discounts everything” – builds all the market’s moods, information and supply/demand dynamics into its price.   The market then has two states – the bull and the bear – each of which has three phases 1) Bull market  (a) reviving confidence – the index starts [...]

Looking for candidates to buy, how about these criteria? 1) A growing business – business with wide and growing opportunities 2) Earnings certainty – a sustainable competitive advantage – strong pricing power 3) Mispriced opportunity – misunderstood business situation 4) Quality management/board – with a track record and significant insider or founder ownership and buying [...]

Tuen Daaisma (chief strategist at Morgan Stanley) signals to look for: 1) Valuations low – Shiller P/E ~10x and Price to NTA ~30% 2) Earnings at cyclical low – ROE below the long run average of 12.8% 2) Fixed income markets rallying while equity market is still heading lower 3) Copper price is bottoming out [...]

Tuen Draaisma is chief equity strategist at Morgan Stanley (with good form on reading the markets) – his lessons from bear markets past… 1) Valuations get very low indeed  (a) Shiller PE to 10x (b) Price to NTA of 30% 2) Equities become cheap slowly – average duration of a bear market is 14 years [...]

Trade parameters 1) Protective stop – set to protect against sustaining a large loss at the time of entering a position 2) Price targets – set to lock in profits  Change in trend signals 3) Gaps against the prevailing trend – something has broken – is it time to get out? 4) Trailing stops – [...]

From David Rosenberg, 1) In order for an economic forecast to be relevant, it must be combined with a market call. 2) Never be a slave to the data – they are no substitute for astute observation of the big picture. 3) The consensus rarely gets it right and almost always errs on the side [...]

From the legendary Wall Street equity strategist whose career spanned 1950′s to 1990′s…ten lessons on the markets 1) Mkts tend to return to the mean over time 2) Excesses in one direction will lead to an opposite excess in the other direction 3) There are no new eras – excesses are never permanent 4) Exponential [...]