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

Pessimism among institutional investors and strategists is still everywhere this morning, while I fight the urge to join in,

“'There’s a lot [for investors] to get worried about,' Crispin Odey, founding partner at Odey Asset Management, told the Financial Times. His fund, which is betting on falling stocks, has gained more than 50 per cent this year, including gains of around 7 per cent last month. That makes it one of the world’s top-performing hedge funds this year, but comes after overly bearish positions pushed him to a near-50 per cent loss in 2016. He said that downwards market momentum is “very difficult to halt” when it is coupled with expensive equity valuations. He added: ‘The only way it’s been halted has been lower interest rates, and that’s not an option.’”

“Hedge funds reap windfalls from market rout” – Financial Times (paywall)

“DoubleLine's Gundlach: Now is the time for capital preservation” – Reuters

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Bloomberg’s Javier Blas is among the best media sources on the energy sector but today he doesn’t have good news for investors in the sector,

“The map lays out OPEC’s nightmare in graphic form. An infestation of dots, thousands of them, represent oil wells in the Permian basin of West Texas and a slice of New Mexico. In less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30 a barrel … August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month last year.’

“Texas Is About to Create OPEC's Worst Nightmare” – Blas, Bloomberg

“Oil bounces above $63 after slide, but glut worries persist” – Reuters

“ "For the second time in a week, Wall Street banks accelerated an oil plunge as they covered exposure to producers’ hedges" – Bloomberg

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Moving back to market disaster porn, Merrill Lynch’ s Hong Kong based equity strategist Ajay Singh Kapur is warning of a really tough environment for investors in 2019,

“Ex-the USA, our indicators point to a pervasive and persistent global downturn. Consensus EPS growth estimates for 2019 of 11% for Asia ex-Japan are at risk, and most likely to see downward revisions. In January this year, Nigel Tupper’s Global Wave was near record highs, but has been falling since May 2018. In January, 68% percent of 38 OECD countries saw YoY increases in their respective leading indicators, but now only 16% are rising. The net proportion of countries with rising leading indicators is now in the bottom decile of its past thirty years’ history. It has been lower only five times in that period.”

“@SBarlow_ROB Oh, man ML is bearish ex-U.S.” – (research excerpt) Twitter

“ @carlquintanilla Like Goldman earlier this week, JPMorgan now sees US GDP growth falling to sub-2% in the next year “ – (research excerpt) Twitter

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Ritholtz Wealth Management’s Michael Batnick argues that the CAPE (Cyclically Adjusted PE Ratio) ratio stopped working as an investment signal a long time ago,

“The average CAPE bottomed in 1955, and has been on the rise for the last 30 years. Which explains a lot of why this strategy would have done horribly in the last few decades… from 1990 to today, the CAPE ratio was above its average 98% of the time… The more you pay for an investment, the less you should expect to receive, on average. But the idea that you can use valuations as a way to time the market is probably not going to work for most people most of the time.”

“Timing the Market” – Batnick, Irrelevant Investor

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Tweet of the Day:

Diversion: Hedge fund manager Ray Dalio gets his book Principles absolutely roasted by a reviewer in American Affairs,

“Principles for Dummies” – American Affairs

Newsletter: “Too much pessimism to sell, too many problems to buy” – Globe Investor