Inverted yield doesn’t kill the bull market

The genesis of today’s preceding post….was this note written nearly 2 years ago.

The notations in the chart within the link said that if the U.S. 10 year minus 2 year spread rose then the bull market is stifled.

Instead the yield curve moved towards and below zero….thus the equities bull market has remained intact.

So much so, the S&P 500 rallied 12% from that June 2021 moment and even today, the S&P 500 is the same price as then.

Hardly, a downdraught let alone a bear market as depicted in the elongated ovals of 2001 and 2008 as per the original post.

Below, is how today’s study looks.

February 17, 2023

by Rob Zdravevski

rob@karriasset.com.au

Could it be a new equities bull market?

My queue in the chart below are the green circles, when the U.S. inverted yield curve is Oversold on a Monthly basis.

This study suggests a new advance or extension in the price of the S&P 500 Index (orange) is underway where the green circles appear.

To counter the bearishness and caution (including mine) along with the growing headwinds that I perceive……the 7th and most recent occurrence over the past 30 years happened in the recent months.

Ignore the pink circles, they relate to the weekly time series but I didn’t want to delete them 😊

February 17, 2023

by Rob Zdravevski

rob@karriasset.com.au

The Euro – 3 prescient buying moments

There have been 3 notable moments when to accumulate the Euro (vs USD) over the past 24 years.

The monthly chart below shows those Oversold moments which coincide with EUR/USD trading at least 15% below its 200 Month Moving Average.

Buying at these moments isn’t about resolve, being brave or ‘having the balls’….it’s about discipline and shutting out the noise around you that the sky is falling.

February 14, 2023
by Rob Zdravevski
rob@karriasset.com.au

The absence of thinking for yourself

“The most contrarian thing of all is not to oppose the crowd but to think for yourself.”

— Peter Thiel

Yesterday it was announced that at some time during the past quarter, Berkshire Hathaway’s 13F had reduced its holding in Taiwan Semiconductor (TSM) by 86% (from the previous quarterly filing).

and so, yesterday TSM’s stock price fell 5%.

This is one example where many who reacted to this news failed to think for themselves.

February 16, 2023

Start-ups or established publicly listed?

Techcrunch published a graphic showing that 50% of investment returns from Venture Capital Funds are less than 1 times the capital invested AND that only 5% of returns resemble 3x.

Shares in Exxon are closing in on a 4x return over the past 30 months and Alcoa shares produced a 12x return in recent times.

February 13, 2023

by Rob Zdravevski

rob@karriasset.com.au