Lessons from Investment Gurus

The Most Important Thing

 Successful investing requires thoughtful attention to many separate aspects, all at the same time. 
Omit any one and the result is likely to be less than satisfactory.

The idea of the most important things—each is a brick in a solid wall, and none is dispensable. 

Hedge fund short covering volume in the past 35 days (since the start of year) is 99.8th percentile going back 10 years. How do we view this and how are we playing it moving forward?

Alex

You say that, but the market is expensive. Both on the Schiller PE and the normal PE ratio. Add that we now have declining earnings ex-energy and it is even more expensive.

https://www.multpl.com/s-p-500-pe-ratio

https://www.multpl.com/shiller-pe

Nop value stocks usually lead. Furthermore the leaders of the past are not the leaders of the next upmove. Would be a world's first.

As I said with current interest rates a lot of that money will not come. But yeah the market is overvalued. You might not believe it, but on every factor we are still expensive. There are a lot of value stocks similar to 2000 that are very cheap, but the overall market is still expensive.

Disagree. I would not consider the market as whole, expensive. Speculative assets got beaten to a pulp for over a year and for good reason. In an upturn, speculative and risky assets tend to go up first. This could very well be a bear market rally and I expect everything to go down a bit due to the aggressive rate hikes that have yet to permeate through the economy. However, I don’t believe that the market is overvalued by any stretch of the imagination. Add to that there is still a lot of money on the sidelines ready to pounce.

SPY is up 7.6% YTD. It already went positive.

If we were really at the lows, it would be the first time in history that an abrupt move in interest rates doesn't influence the stock market heavily. Additionally the stock market is still very expensive given historical levels - and is currently getting more expensive as earnings from nearly all companies except energy are coming down.

IMO is is a bear market rally. Apple had terrible earnings and trades at a PE of 25. Last time they had this slowdown in growth they traded at a PE of 10 ((2016) - and back then the FFR was 0.6 not 4.33 like today.

SPY is up 7.6% YTD. It already went positive.  If we were really at the lows, it would be the first time in history that an abrupt move in interest rates doesn't influence the stock market heavily. Additionally the stock market is still very expensive given historical levels - and is currently getting more expensive as earnings from nearly all companies except energy are coming down.  IMO is is a bear market rally. Apple had terrible earnings and trades at a PE of 25. Last time they had this slowdown in growth they traded at a PE of 10 ((2016) - and back then the FFR was 0.6 not 4.33 like today.

Jerome Cody

Todd Smith

You say that, but the market is expensive. Both on the Schiller PE and the normal PE ratio. Add that we now have declining earnings ex-energy and it is even more expensive.  https://www.multpl.com/s-p-500-pe-ratio  https://www.multpl.com/shiller-pe  Nop value stocks usually lead. Furthermore the leaders of the past are not the leaders of the next upmove. Would be a world's first.  As I said with current interest rates a lot of that money will not come. But yeah the market is overvalued. You might not believe it, but on every factor we are still expensive. There are a lot of value stocks similar to 2000 that are very cheap, but the overall market is still expensive.

S&P 500 PE Ratio chart, historic, and current data. Current S&P 500 PE Ratio is 22.01, a change of -0.25 from previous market close.