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The Globe and Mail

More than half of fund managers are beating the index

A general view of a crude oil importing port in Qingdao, Shandong province, in this Nov. 9, 2008 file photo.

China Stringer Network/Reuters

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

If news broke that two Canadian provinces or U.S. states were falsifying economic data, the resulting sell-off in equity and bond markets would be stupendous in fear that others were doing the same. Yet in China, the world's second largest economy and the main driver of resource prices, this happened and no one blinked,

"Some areas and companies in Jilin and certain places in Inner Mongolia falsified reports, the Communist Party's Central Commission for Discipline Inspection said in statements late Sunday … Liaoning province, which neighbors Jilin in the northeast, this year admitted faking fiscal data from 2011 to 2014."

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"Two Chinese Provinces Faked Economic Data, Inspectors Say" – Bloomberg


The Financial Times reports that 52 per cent of U.S. large cap fund managers are beating their benchmarks so far in 2017, adding that "If the trend held steady, it would mark the first time the hit rate has exceeded 50 per cent since 2009."

Indexing remains the best long-term strategy for most investors and the added diversification provides significant advantages. The statistic is a reminder, however, that no one is managing valuation and concentration risk in an index.

Passive investing is a bit like equity research and strategy in that during a bull market no one needs it, and during weak markets when it's often more effective, no one wants it.

"Five markets charts that matter for investors" – Financial Times


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Are retail malls really dying? Five experts weigh in,

"The death of brick-and-mortar retail" – Axios


One lesson from the domestic Home Capital Group situation is that investors are currently very sensitive to disaster scenarios. Bloomberg adds to the theme,

"Prophets of Doom With Too Much Gloom" – Bloomberg
"@awealthofcs A reader sent this to me. If nothing else, Jim Rogers is consistent in calling for a crash every single year " – (includes links) Twitter


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The sell-off in technology stocks that began Friday for still unknown reasons continued overseas Monday. I'm not sure what to say about it so far and suspect that sentiment and technical factors will drive industry stock prices this week. One of the difficulties is that is one of the more grossly expensive stocks but its also one of the few that's been through this before.

"@WSJMoneyBeat Goldman took a look at how the tech bubble compares to today.… by @BenEisen " (valuation table) Twitter
"Tech Selloff Spreads; Pound Slides as May Battles: Markets Wrap" – Bloomberg


Tweet of the Day: "@a_coops1 #Brent specs must be pretty pleased - BRENT CRUDE SPECULATORS CUT NET LONG POSITIONS BY 42,357 CONTRACTS TO 307,523 IN WK TO JUNE 6 " – Twitter

Diversion: "In one year, drug overdoses killed more Americans than the entire Vietnam War did" – Vox

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