Educational Segment | StockChase
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Compiling comments that experts make about stocks while on public TV.

Educational Segment

Date Expert Opinion Subject
2016-03-21 Larry Berman CFA, CMT, CTA

Educational Segment.  Why Raising Retirement Age is a Good Idea.  A Lawyer and an Actuary penned an article about why it was a bad idea to roll back OAS from 67 to 65.  We are all living longer.  OAS started in the 1950s and life expectancy was 80.  Now if you live to 65 you are likely to live to 85.  We will be at 16% young people going forward, but the number of old people will be going up dramatically (16-24%).  Governments are inept at dealing with people living longer.  The kids are going to pay.  Each one owes $38k right now.  The US will be out of OAS by 2039 if they don’t change policy. 

2016-03-14 Larry Berman CFA, CMT, CTA

Educational Segment.  After the recent market rally what comes next?  The markets popped in the last week and now we are into a period of resistance.  We are in a global bear market and have we bottomed?  Market breadth: The US market has had good breadth, but not around the world – mixed reading, slightly negative.  Valuations higher than ever, earnings likely to be flat for the rest of the year, so we are on the high end.  A lot of earnings growth is from share buy backs over the last 4 years.  Is the market respecting support and resistance levels – no.  He believes we are in a bear market.  He believes we will retrace to around the 1600 level (25% from the peak).

2016-03-07 Larry Berman CFA, CMT, CTA

Educational Segment.  Negative Interest Rates.  The yield to maturity in the world in bonds is 1%.  The central bank in the US controls short interest rates as well as to supply and drain liquidity from the marketplace.  Quantitative easing is a more permanent operation.  He believes interest rates will stay low for some time.  US debt to GDP shot up during the Ragan years.  Then in the Lehman moment, they borrowed 9 trillion dollars. 

2016-02-29 Larry Berman CFA, CMT, CTA

Educational Segment.  Super Tuesday.  The political establishment is mortified at what Donald Trump has been able to do.  You have this rip in the party.  Texas is key here.  Trump has been able to win because the Republican party is split.  Texas is tomorrow night (Super Tuesday).  After that Trump may be able to be challenged.  He has not said one thing that is economically decent.  The markets are not likely to go down on Wednesday because you have the March 10th ECB announcement.  Then you want to wait for March 15th, after that volatility will increase.  You want to take down the risk after the 15th.

2016-02-22 Larry Berman CFA, CMT, CTA

Educational Segment.  Bear Markets.  Once you are armed with the facts, you get a lot of valuable information about the markets.  From 1928, the S&P (a third of the capitalization in the entire world), measuring all the bear markets, the average correction is 13% and this is where people start to panic.  This is not when you should sell, but when you should buy.  The problem is the 22 papa bear markets that are 19% or more and they average a 34% decline.  And the question is "are we in one of those?"  They happen because of extreme valuations (not now), or the financial systemic risk (not now), and the great depression.  In the absence of those three, the average is 20% and no more.  We just had a bit over 15% of a correction recently.  He thinks there is another leg down in this bear so every time the market goes another leg up he takes his equity exposure down.

2016-02-08 Larry Berman CFA, CMT, CTA

Educational Segment.  How to make Smart Monthly Withdrawals.  0.8% is the monthly average return of the S&P over history.   Look at the percentage difference between the current S&P price and the 21-day moving average.  If the current monthly return is twice as much as the average monthly return, it is time to take money out of the market.

2016-02-01 Larry Berman CFA, CMT, CTA

Educational Segment.  Dollar cost averaging.  For the average person, if you are smart, you can make informed decisions beyond dollar cost averaging.  But don’t just invest on the month end.  He looked at the VIX index.  He took a rating of -1.57, and said put that same money in the market when it declines that much.  This is Smart Dollar Cost Averaging.  -1.57 is based on volatility and this is the moment you need to invest.  You don’t know whether to do it at the close or the next morning but he prefers the afternoon of the day of that volatility.

2016-01-25 Larry Berman CFA, CMT, CTA

Educational Segment.  Standard Deviation.  In December, securities regulators put out a paper for comment about more disclosure for mutual funds.  People don’t understand the true cost of investing.  However, the biggest cost to investors is really the emotional costs – the volatility.  People sell when they should be buying.  Standard deviation defines risk.  Looking back over 10 years, higher than 20% on your return means +60 to -40%.  The real cost of investing is being able to stay in the market to get that return.  ETFs are good for keeping in the stocks for the long term.

2016-01-18 Larry Berman CFA, CMT, CTA

Educational Segment.  Are global markets oversold?  Everything he looks at tells him we are ripe for a new trading rally.  We won’t make higher highs, however.  Canada will outperform.  He looks at the percent of stocks above the 200 day moving average.  Only 16.5% (it is very low compared to other periods earlier in the year) of global stocks are above it now.  It was over 50% back in August.  Sell into rallies.  

2016-01-11 Larry Berman CFA, CMT, CTA

Educational Segment.  The Relative Strength Index (RSI).  It looks at the average gain and the average loss over the last 14 days.  The average RSI of SPY-N (S&P 500) going back 22 years is about 54.  The standard deviation (volatility) is 11.  It hit below 2 standard deviations (32) last Friday.  Historically following this point the return has been 3.11% vs. 0.82%.

2015-12-21 Don Vialoux

Educational Segment.  The Electoral Seasonality.  During a presidential election year, the US market slightly underperforms the average.  There is not much change earlier in the year.  But super Tuesday is March 1st when 14 primaries happen.  Around the end of May they have their candidates and from there until the beginning of September, the US market outperforms what it usually does.  The market then goes down until just before the election.  This year they changed the election laws regarding campaign spending (Super Packs).  After the election on November 8th, the markets go higher until the end of the year.

2015-12-14 Larry Berman CFA, CMT, CTA

Educational Segment.  A Recap of his 2015 Predictions and a look at 2016.  China slowed as he predicted.  He expected the anti-EU party to get in in Greece.  He thought they would leave the EU and still thinks it will eventually do so and also that the EU will eventually break up.  In 2016 the biggest risk is credit risk.  The last time credit spreads were this high, the S&P was 20% lower.  He sees a 15-20% correction in 2016.  There are geopolitical risks, ISIS being one of them.  He expects the Fed rate to be 0.75 to 1% by the end of next year.  He predicted crude oil would go down and he thinks it will at best get back to $60 by end of 2016.

2015-12-07 Don Vialoux

Educational Segment. How the markets have reacted to previous rate increases + the El Nino effect on stocks.  The market always goes down prior to the first rate increase.  After the rate increase, the market over the next 3 months goes up over 10%.  The US dollar goes lower.  The same has happened in Canada 6 of 7 times.  Environment Canada has said it will be warmer than average in Canada because of El Nino.  Industrial production increases because more can get done in a warmer winter.  Stock markets do better because of these production increases, although retailers sell less winter coats, energy does less well also.  Don’t be afraid to be in markets over the next three months.

2015-11-30 Larry Berman CFA, CMT, CTA

Educational Segment.  Tax Loss Selling.  This is tax loss selling season.  Energy is the worst sector this year.  FHE-T gives a selection of US energy companies, traded in Canadian dollars, no hedging.  You sell the stocks for tax loss and then buy back this ETF to keep your exposure.  They decided not to hedge to the US $ last year.  Canadian dollar ETFs with US holdings are not subject to US estate taxes on high net worth investors upon death.

2015-11-23 Larry Berman CFA, CMT, CTA

Educational Segment.  Roll-ups in Horizons ETFs.  It is a round of consolidations of ETFs through unit consolidations.  It has to do with moving from one futures contract to another, where you lose some premium.  HNU-T is one of their most popular ETFs.  The loss of some premium of futures contracts is a headwind for this ETF.  The average hold time is a day or two.  Your average hold time has to be less than a week.

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