Stocks & Bonds

Russell 2000: Tiptoeing on the Edge

There’s a whiff of panic in the air. Since small-cap stock benchmark Russell 2000 turned 1000 a month ago it has slipped into consolidation along with the broader market. Though the index is only off 6% (hitting its corrective low-point today) from its peak May 22, this decline is almost…

Using Risk Metrics to Gauge Prospective Equity Risk Premium

Damodaran (2011) explained that there were three methods by which to calculate a prospective Equity Risk Premium. The first is to survey investors and academics, in a similar fashion to Welch (2000). The second is to base the calculation on historical equity returns against an appropriate risk-free rate and the…

Market Masters: Short-Selling; Sell High, Buy Back Lower

By Madison Montana      One advantage of short-selling is that an active investor can be profitable in a rising or falling market environment. In uncertain markets one can use shorting to hedge against long positions. This is particularly beneficial when Political, Market or Idiosyncratic Risk is present in the trading environment. Mechanics: …

Emerging Markets Performance Checkup: BRIC vs Ex-BRIC

When the terms “growth” or “growing economies” are mentioned, most active investors immediately think of emerging markets, such as the BRIC nations: Brazil, Russia, India, and China. The renowned Jim O’Neill (ret. Goldman Sachs) coined the acronym in 2001 and described those countries as in the stage of advanced economic…

Corporate Profit Margins: A Different Take

One of the more useful (and apparently underused) tools I’ve stumbled on in macroeconomic analysis is the Kalecki Profit equation for evaluating corporate profit margins. It’s frequently joked about that Eastern Europe has its own version of everything (tv shows, cars, etc…); sure enough, they had their own Keynes. Michael…

FXStreet.com Interview with Alex Bernal

Here is an interview that I recently did with FXStreet.com, talking about my background, expertise, and thoughts on the financial markets. In the interview with FXStreet.com, we cover a series of charts, offering up analysis on key commodities, currencies, bonds, and stock market indices. A special thanks to Dale Pinkert for…

VIX Fear Near Recent Extremes as SPX Tests Support

The VIX (CBOE Market Volatility Index) has reached an extreme fear level, based on behavior this year, at the same time the S&P 500 is testing chart support at 1597.4 taken from the April high. The VIX measures fear versus complacency in the crowd by how options on the S&P…

Market Masters: Why Investor Confidence Is King

For today’s Market Masters column, I’m going to focus on investor psychology. And more specifically, the value of personal investor confidence. As many of you are fully aware, trading is a difficult endeavor: It is fraught with risk, high stakes volatility, and real-time decisions. One day you are on fire,…

The Best of See It Market – May

May was another great month for content on See It Market. A special thanks to our contributors and readers. You all rock. Highlights from the month of May included the successful launch of our new exclusive series, “Market Masters.” This educational series includes some of the finest minds in the…

Market Masters: Preparing for Rising Interest Rates

By Naufal Sanaullah    The impact of Fed’s large-scale asset purchases (LSAPs) on interest rates continues to be one of the most contentious topics in financial circles, more than four years after quantitative easing began. Since QE swaps yielding UST and MBS product with cash, it reduces the [ten-year equivalent]…