Top Trading Links: Earnings, Geopolitics, And A Heavy Dose Of Research

Three major themes this week in the market are earnings season, Charlie Munger and the inflation trade and related debates. We’ll cover these and more in this week’s Top Trading Links.


Market Insights

“Why hasn’t the market collapsed under this bevy of divergences and slowing momentum? The likely answer is demand. There has been enough capital flowing into U.S. assets. Low rates of return domestically (and even more so abroad) continue to force capital out of cash reserve accounts. Since the financial crisis, other countries have tried to play catch up with QE/stimulus and this has spawned extremely low to negative interest rates in Europe and elsewhere.”

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corporate earnings_actual estimates_2012-2016



crude oil prices long term chart bottoms

also, @andrewnyquist notes we’re seeing activity in the oil market that’s consistent with that right before a major move.


  • Geopolitics are scorching hot as tensions continuously rise and mini wars are occurring across the globe. @ritholtz talks about the impact wars play on investments.


Economics & Policy

“As economist Ed Yardeni explained in his Monday note: “Repeat after me: Easy money is deflationary. I know that’s hard to believe since we’ve all been taught that easy money is inflationary, [but] easy money can also stimulate supply, especially in recent years because producers overestimated the ability of easy money to boost the demand for their goods and services. Easy money allows “zombie” companies to stay in business, thus boosting supply, even though they are losing money.”



Trader Psychology

“The first step is to realize that your job is not to trade–rather, your job is to take the best trades. Your job is to take on the right types of risk at the right time, and, sometimes, maybe for a long time, this means doing nothing.”




“Instead of reading asynchronous messages, you can jump in live, with friends, to view the world through someone else’s eyes and talk and express yourself together. For artists and creators, we think this will inspire a new way of engaging with their fans and enable them to create and earn significant new value for their content along the way too.”



Investment research

“A long-short portfolio that exploits this differential firm behavior earns abnormal returns of up to 182 basis points per month, or over 21 percent per year. Further, firms that cast their calls have higher accruals leading up to the call, barely exceed/meet earnings forecasts on the call that they cast, and in the quarter directly following their casting tend to issue equity and have significantly more insider selling and stock option exercises.”



Much about Munger

“The finance industry is 5% rational people and 95% shamans and faith healers.”


“There’s two things I’ve learned in my long life: never feel sorry for yourself and don’t have envy, it’s the only one of the deadly sins that isn’t any fun”


  • Haven’t read a lot about Munger? Check out this mega PDF file filled with some of Munger’s best speeches, quotes and appearances.
  • @trengriffin delves into the most important concept Munger discusses: not being stupid.


Check out our “Top Trading Links” archives. Thanks for reading! Enjoy the long weekend!


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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.