Greenspan had a theoretical put, so why can't Bernanke? Well, he does. This theoretical Greenspan Put is a belief that, given a "market crisis", the Federal Reserve chief would step in and lower key rates to avoid a systematic crisis. We have seen this several times with Bernanke since he took over the reigns. Even the rumors of Fed action is enough to create the most dramatic of market rallies (as witnessed on November 28th , 2007 as the DJ-30 gained 330 points). If you are short, you will feel the pain. These types of events are what make shorting more risky than being long.
Nouriel Roubini does a fantastic job looking into the recent market rout and subsequent Fed inspired rally. Spend some time with the full article, it will help shed some light on the recent developments in our economy and just might save your financial future.
How sharply will the US stock market fall if the US experiences a recession? Given the recent flow of very negative macro news, the likelihood of a US hard landing has sharply increased; thus, it is important to assess the implication of such growth slowdown, hard landing or outright recession on the stock market.
It is true that in the last two days the US stock market has recovered sharply after a significant 10% downward correction in the period from early October until Monday. But the most sensible interpretation of the upward move on Tuesday and Wednesday this week (in spite of an onslaught of lousy macro news: consumer confidence, existing home sales, Beige Book, fall in durable goods orders, regional Fed manufacturing reports, initial claims for unemployment benefits, expectations that Q4 growth will be closer to 0% after the revised 4.9% in Q3, sharply rising credit losses, falling home prices and a worsening housing recession, etc.) is that this is the last leg of a sucker's rally (or dead cat's bounce) driven by wishful hopes that the Fed easing will prevent a recession.
Certainly yesterday Wednesday equities rally was totally driven by Fed governor Kohn signaling the obvious, i.e. that given that the liquidity and credit crunch is now worse than at its August peak the Fed will cut rates in December, January and for as long as needed. In this game of chicken between the Fed and the bond market (with the latter signaling already for a while that the Fed will keep on cutting) the Fed was obviously the one to blink: this was no surprise to anyone who had noticed the meltdown in financial markets (a ugly liquidity and credit crunch) in the last few weeks. But for some reason the stock market on Wednesday discovered what analysts, the bond market and credit markets knew all along, i.e. that the Fed will have to keep on cutting rates as we are headed towards an ugly recession that is now inevitable regardless of how much the Fed cuts rates.......
Hi, I'm Chris Hall the principle of Keystone Capital Management in Boulder, Colorado, where I manage a "moderately conservative" portfolio of Exchange Traded Funds or baskets of stocks (like mutual funds but with greater efficiency)that generally focus on sectors, countries, or exchanges.
I am also a competitive "rec" athlete. Through my years of competition I have trained with and been dropped by many of the top level triathletes in the business today.
Welcome to my blog. For this first posting I will give you a little of my background via some quick life highlights. I was raised in Midland, TX (yep, 180 degrees away from Boulder, CO). I grabbed my High School Diploma on the way out the door to Colorado, where my real adventure begins.
By the time I had moved to Colorado I had already climbed Mt. Whitney in California, and Mt. Rainier and Mt. Baker in Washington, learned to ice climb (on the local Midland, Tx., trees), and dove off the coast of Kauai.
Once in Colorado I spent my first few years really climbing both rock, ice, and some big peaks. Oh, and I spent some time on the University of Colorado campus with the aspirations of becoming a doctor. My advisor took some issue with that notion as I was not "Med School material". Turns out he was correct, but for different reasons. I did manage to finish up my undergraduate work at the University of Colorado with duel degrees in Biochemistry and Molecular Biology. Turns out that I really didn't have a passion for the sciences but the undergraduate work did wonders to develop my analytical side which plays a major role in my current work.
By my senior year I had worked my way onto the University of Colorado Triathlon Team (to meet girls of course). Well, I didn't meet any girls but did mange to find a skill set that I maintain to this day. I fell in love (for lack of better words) with the sport and immediately took it to the highest level. I began training for the iron distance triathlons (I am too slow for the short stuff). By November of 2000 I completed my first full length iron distance triathlon, The Great Floridian.
By the end of November, that same year, I found my self in the Vail Hospital with two broken ankles. I took a pretty substantial fall ice climbing. I was picked to lead the very sketchy climb because I was the only one with insurance at the time. After being CAT scanned from head to toe (with special interest in my heart; they wanted to make sure it was still attached to my aorta), and having my ankles bolted back together, I was left to deal with the pain and realization that I might never properly walk again. This hurt much more than the mess below my tibiae. Months and months later I did finally take my first run of 100 ft. A year later I would go on to run my first marathon. I did return and returned with a vengeance. If anyone is interested I can make a few posts on that experience.
During the days of crawling on the floor with my busted bones I decided to head into the business world and work towards an MBA. As it turned out my MBA (student loans) helped to finance my professional amateur triathlon career. By 2004 I was qualified to compete in the Ironman Triathlon World Championships in Kona, Hawaii. Yep, the big one. Life is a compilation of each of our past experiences. Ironman training, while not providing me with direct career experience, helped me to develop dedication.
I completed this and began selling Microscopes, and other high end imaging equipment and accompanying software out of Salt Lake City. This lasted about a year and a half. My heart was with the stock market not the sciences. During this time I had also managed to obtain a Master's degree in Finance. My path was now set. I loved the stock market.
My focus was now on my career. I was still athletic but not what I was. Again, a topic for another post. The transition from peak performer to an "also ran" is more difficult than is advertised. I suspect this is why many professional athletes come out of retirement. I did manage to qualify for the Xterra off-road World Championships in Maui, HI but another injury derailed that experience. I would now be starting over at the very bottom of the heaps of people trying to jockey a successful career. I would draw on my years as an athlete to carry me.
Deciding to pursue a financial oriented career, I landed a position back in Boulder, CO, with a stock advisory firm (Winning on Wall Street) where I would take phone calls and tell our members what I thought of their stock ideas. I also was able to spend some time co-hosting the associated radio program.
With my new found knowledge of stock analysis, risk management, economics, and my desire to be a professional portfolio manager I started Keystone Capital Management. This is where we will start this blog. I want to share the trials of being forged by fire into a professional polished money manger. This has been the most difficult venture I have ever undertaken. The street level learning and psychology of dealing with other people's trust and future is more than I ever could have imagined. It has been a fascinating journey that I hope you will enjoy and participate in.
Disclaimer
The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. I am a Registered Investment Advisor. The statements made in this blog represent my general understanding of the broad economic environment. For individual considerations, I can make arrangements to speak personally.
No comments:
Post a Comment