Back to the Future: Mean Reversion

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My December 2019 Seeking Alpha article, “Mean Reversion + Valuation = Opportunity” identified underperforming asset classes that were attractively valued and poised to generate above average returns in the future. Here we revisit how those assets have performed since the beginning of 2020. There is strong evidence of a sector rotation underway. Nine of 13 […]

How Market Timing Destroys Wealth

StopWatch resting on plots of monthly stock market averages. Focus is on upper watch face.

So-called “experts” are telling us about the coming uber-bear or why the bull market will continue. Yet the data show that trying to predict the market’s direction to time buys and sells is the wrong approach to investing. Data from the last seven bear markets show that a large percentage of losses and gains happen […]

CXSE: An Opportunity to Buy the Dip in the Best China Equity ETF

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China is a world economic superpower and is overtaking the U.S. Chinese equities are attractive but have recently pulled back due to regulatory actions and profit taking. Recent weakness appears overdone while underlying fundamentals should prevail in the long term. Double-digit annual return potential and portfolio diversification outweigh reasonable risks. Read the full article at […]

Beware Using News to Trade Tesla

Tesla and Bitcoin: Shared Sentiment

Studies indicate that news about companies has an immediate effect on their stock price. Here, we consider 18 news events related to Tesla over a nearly three month period to determine what this might tell us about their explanatory powers relative to price movements. Resultant price action indicates that movements are often independent of the […]

ISCF Captures The Best Opportunity In International Small-Caps in 20 Years

World map with charts and graphs as symbols of global finance

In “International Small-Cap Equities: Poised to Outperform” I described the upside opportunity due to mean reversion, favorable valuations, the prospects for a declining dollar, and a worldwide economic recovery. The small cap sector is the cheapest since 2000. Historically, this has resulted in an annual return size premium of seven percentage points over subsequent three-year […]

CXSE: The Best China Equity ETF

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In “Why Investors Are Underweight China Equities, But Should Reconsider,” I described why China is the rising power vying to overtake the U.S. on the world stage. The article made the case for investors to consider allocating 10-15% of their equities to China. After reviewing the leading ETFs in this space, the Wisdom Tree China […]