by Jeff Miller
It is time to make an assessment. Whether you are an investor or a trader you need to ask three questions:
1. How am I doing?
2. Is my method working in a time of extreme volatility?
3. If I expect continued volatility, should I change my approach?
<>After another week of record-level volatility, these are fair questions. Here is an excellent perspective from two sources (via Abnormal Returns -- finding the best articles for us, day after day). From Dynamic Hedge we see what I will call the opportunity. This chart shows how well you might have done if you understood when ranges were broken and when they would hold.
by Gary, at Econintersect Live Market
Editor’s note: Gary has a live diary entering his activities as they happen during the hours the NYSE is open. He intersperses thoughts on what he is reading in between observations on how the market is doing. This is a list of all the articles he mentioned during the past week. We will start with end of the day Friday and progress backward through Gary’s commentary to his opening remarks Monday morning.
by Guest Author Bill Barnhart, Y-Charts.com
By all accounts, celebrity hedge fund investor John Paulson (pictured) is having a bad year. The consummate Wall Street insider, linked conspiratorially to Goldman Sachs’ (GS) role in the 2008 financial collapse, he’s one of the stars of the Occupy Wall Street rogues gallery.
And perhaps Paulson’s clients may be among the demonstrators. The Paulson & Co. investment firm bet on big bank stocks, such as Bank of America (BAC), Wells Fargo (WFC), JP Morgan Chase (JPM) and Citigroup (C). All have scored far worse than the benchmark S&P 500 index in the last 12 months. Through September Paulson’s principal fund was down 44% this year.
by Doug Short
Originally posted at Advisor Perspectives/dshort.com
Note from dshort: With today's sell off in equities, the flight to safety (and accompanying decline in yields) was no doubt driven by the fear of Eurozone contagion rather than the Fed's Operation Twist.
The Federal Reserve officially announced Operation Twist on September 21 with the stated purpose of lowering longer-term interest rates. The yield on the 10-year note had been been below 2.00% 5 of the 9 days prior to the much-rumored announcement, closed at a new low of 1.88% on the day of the announcement and reached the historic closing low of 1.72 the next day, September 22.
by Art Patten, Symmetry Capital Management
The broad rally in equities in October was massive, regardless of whether one views it as a dead cat bounce or a new leg up. Either way, it was enough to cause investor whiplash, and correlations across individual stocks remain historically high.
For the S&P 500, it was the eighth highest monthly return since 1950.
Click on graph for larger image.