Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
I've called George Soros the best investor alive, and meant it, even if that stretches the definition of "investor" – he's more of a speculator.
But it doesn't bother me too much that Mr. Soros has increased pessimism regarding the S&P 500 in preparation for a 2008-like market event. Mr. Soros's legend is not based on having better investment ideas – former colleagues have guessed he gets only one in five trades right – but that he is spectacular at selling losing positions before they cost him a lot of money, and letting his winners run forever. In his words, "I'm only rich because I know when to sell."
"Soros Fund Management doubles bet against S&P 500" – CNBC
"Billionaire Soros Cuts U.S. Stocks by 37%, Buys Gold Miner" – Bloomberg
"George Soros Sees Crisis in Global Markets That Echoes 2008" – Bloomberg (January 2008)
See also: "Raoul Pal: The stock market is behaving the way it did back in 2000" – Yahoo Finance
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In other Soros news, Bloomberg uses his new acquisition in Barrick Gold as an excuse to explain the sharp rally in bullion miners in five charts,
"Currencies in the top producing nations have strengthened against the dollar in recent months, they're still much weaker than two years ago. That's good for miners outside the U.S., who pay costs in local currencies but earn revenue in dollars. Russia's ruble has dropped about 45 per cent and the South African rand is down almost a third since mid-2014."
"Five Charts Show Why George Soros Is Investing in Gold Mining" – Bloomberg
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Major U.S. research houses continue to turn bearish with Citi publishing the most recent report urging investor caution,
"Several indicators are sending some worrying signs that need to be monitored for possible deterioration. While investor sentiment and valuation criteria continue to be supportive of equity market upside opportunity, there are a few charts that generate some legitimate concern when considering 2017's economic prospects. Small business optimism has dipped of late, adding complexity to the Fed's path for raising rates as well."
"@SBarlow_ROB Citi's Levkovich warns on economy pic.twitter.com/pol3NkDK6v - Twitter (research excerpt)
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Merrill Lynch chief quantitative strategist Savita Subramanian wrote an even more dire short-term outlook in "Put your shorts on … it's summertime",
"An increasing number of charts in our work depict levels that are only prior to a bear market. The distress ratio is at levels that led the last two bear markets. Corporate buybacks, in aggregate, tend to top-tick the market, and the proportion of companies buying back shares is near all-time highs, at the same levels as the '07 peak. And the number of companies for which analysts forecast losses is at levels never seen without a bear market. "
"@SBarlow_ROB Subramanian "number of companies for which analysts forecast losses is at levels never seen without a bear market." pic.twitter.com/Ztw3pkPyxt " – Twitter (research excerpt)
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Goldman Sachs is also pessimistic about summer markets, writing "Unbalanced distribution of upside/downside risks suggests "sell in May" or buy protection."
"@SBarlow_ROB Not to be left out, Goldman also not looking forward to summer markets pic.twitter.com/tSTJIksvVr " – Twitter (research excerpt)
In each of these cases, investors might be tempted to view the bearishness as excessive, and a contrarian buying signal, but given the preponderance of negativity, I'd like to think about it a bit longer.
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Tweet of the Day: "@michaelbabad A chart guaranteed to chill the Bank of Canada tgam.ca/EOn0 $MACRO #cdnecon pic.twitter.com/NwuQeEOPaN – Twitter
Diversion: "Metro Engineers Unearth 10,000 Square Feet of Ruins Beneath Rome" – Gizmodo
Scott Barlow