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Why the Second Law of Thermodynamics Matters in Financial Planning

 January 19 2017     Anna Pfaehler
The second law of thermodynamics states that the state of entropy of the entire universe, as an isolated system, will always increase over time – or things fall apart. Harvard Professor Stephen Pinker recently wrote for Edge.org: “Not only does the universe not care about our desires, but in the natural course of events it will appear to thwart them, because there are so many more ...

CEO Confidence Surges Higher

 January 16 2017     David Templeton
Early this month The Conference Board reported the fourth quarter 2016 Measure of CEO Confidence. The fourth quarter reading was reported at 65 and is the highest reading since the first quarter of 2011. Readings above 50 indicate more positive than negative responses.Notable highlights from the report as reported by PR Newswire:"CEOs' assessment of current economic conditions was considerably mor...

A Chart Supporting Market Bears

 January 15 2017     David Templeton
For investors and analyst it is important to read and evaluate perspectives that run counter to ones own in order to increase the likelihood they are not missing something in their analysis or thinking. For example, the equity market has essentially moved higher, uninterrupted, since the end of the financial crisis low in 2009 and the bull market seems to want to continue; however, is there someth...

Trying To Market Time Is Fraught With Risk

 January 14 2017     David Templeton
The U.S equity market has certainly had a nice recovery since the financial crisis low in 2009. The magnitude and length of the recovery may have some investors contemplating selling their equities in favor of sitting on the sidelines until the next pullback.A few charts have circulated in the blogosphere recently noting the positive impact on an investor's total return if they simply miss a few o...

Buy The Rumor, Sell The News

 January 6 2017     Matt Woebkenberg
The old investing adage “Buy the rumor, sell the news” comes to mind following the “Trump Rally” to end 2016. As we all know, President-Elect Trump has not yet been sworn into office and yet, the year-end climb in US markets has been mostly attributed to his policy proposals. This makes sense as the market is always forward-looking, but it is important to keep in mind that it often overshoots in...

Buybacks Decline In Q3 2016, But Cash At Record Level

 January 5 2017     David Templeton
At the end of December S&P Dow Jones Indices reported information on S&P 500 buybacks and dividends for Q3 2016. The preliminary report noted quarter over quarter buybacks decline 12% and year over year buybacks fell 25.5%. The continued decline in buybacks may be a result of companies retaining cash due to the uncertainty surrounding the November election. Dividends were up fractionally QOQ and u...

Winter 2016 Investor Letter: Rising Confidence And The Populist Movement

 January 3 2017     David Templeton
In our Fall 2016 Investor Letter we discussed how emotions tend to run high around certain periods like the recent U.S. election. We noted in that newsletter that emotional investment decisions can drive investors to reduce their stock market exposure and harm long term returns. Certainly, the equity market performance following the the November election was one that strongly rewarded investors th...

Equity Market Technicals Still Leaning Bullish

 January 3 2017     David Templeton
Yesterday I wrote that investor sentiment is broadly more bullish at the start of 2017 versus the beginning of 2016. Elevated bullish sentiment tends to be a contrarian indicator and can coincide with near term market tops. Now having noted the heightened sentiment measures, but shifting to a technical view of the market, some market excess has been worked off in the last few weeks of December wit...

Investor Sentiment More Bullish Than A Year Ago

 January 2 2017     David Templeton
In 2015 investors had to contend with a very volatile equity market during the summer months. On August 24, 2015 the Dow fell 1,000 points intraday before closing down 588 points. This volatility extended into October with the end result, the S&P 500 Index was up only 1.4% for all of 2015. This level of volatility and flat returns left investors anything but bullish going into 2016. As fate would ...

The Final 2016 Dogs Of The Dow Performance And the New 2017 Dow Dog Changes

 December 31 2016     David Templeton
The 20.5% return for the 2016 Dogs of the Dow exceeded the performance of both the Dow Jones Industrial Average and the S&P 500 Index in 2016. The Dow Dogs returned 20.5% versus 16.4% for the Dow Index and 12.0% for the S&P 500 Index. The best performer of the Dogs was Caterpillar (CAT) up 42.2% with the weakest performer being Pfizer up only 4.5%.File (xls)For the coming year, 2017, two of the ex...
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