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Hedge Fund Myths & Facts. Also Foundations and Hedge Funds.

Author: David Kotok, Post Date: August 22, 2016

WealthManagement.com (http://wealthmanagement.com) has just published an insightful piece called “Busting 10 Hedge Fund Myths” (http://m.wealthmanagement.com/equities/busting-10-hedge-fund-myths). Here’s how they lead off: “Genius hedge fund manager delivers alpha in good times and bad through stellar long and short stock picking, makes prescient market calls, thrives on market volatility and (unlike mutual fund managers) is perfectly aligned with […]

LIBOR & Fed?

Author: David Kotok, Post Date: August 19, 2016

“Because US dollar (USD) LIBOR is used in such a large volume and broad range of financial products and contracts, the risks surrounding it pose a potential threat to the safety and soundness of individual financial institutions, and to U.S. financial stability.” (Federal Reserve Alternative Reference Rates Committee, “Interim Report and Consultation,” May 2016: https://www.newyorkfed.org/medialibrary/microsites/arrc/files/2016/arrc-interim-report-and-consultation.pdf) […]

Cash, NIRP & Bonds Part-3

Author: David Kotok, Post Date: August 18, 2016

On July 29 we published a long piece entitled “Cash, NIRP & Bonds” (http://www.cumber.com/cash-nirp-bonds/). We published Part-2 on this past Monday. See http://www.cumber.com/cash-nirp-bonds-part-2/. Having talked about cash, let’s now add negative rates to the calculus an investor must perform. With a positive rate, we can compute the sensitivity of a bond’s price to a change […]

The BOJ’s ETF Purchasing Program

Author: Bill Witherell, Post Date: August 17, 2016

The Bank of Japan decided at its July 28–29 meeting to boost its purchases of exchange-traded funds (ETFs) to an annual rate of 6 trillion yen, almost double the previous rate of 3.3 trillion yen. The BOJ began its ETF purchasing in October 2010 at a much more modest annual pace of roughly 450 billion […]

LIBOR!

Author: David Kotok, Post Date: August 16, 2016

The bottom line is that we think the financial/banking system is tightening and we are now defensive. We have raised cash in our US ETF accounts, and we have taken bond profits and shortened duration in total-return bond portfolios. We are applying very high standards to credit. No junk bonds. No opaque fund-of-funds-type hedge funds. […]

Cash, NIRP & Bonds—Part 2

Author: David Kotok, Post Date: August 15, 2016

On July 29 we published a long piece entitled “Cash, NIRP & Bonds” (http://www.cumber.com/cash-nirp-bonds/). Now we see a German bank succumbing to pressure and starting to charge its customers a pass-through of the negative interest rate that the commercial bank is paying to the central bank. In the eurozone, the lowest negative rate is minus […]

More on the Costs of Political Failure on Zika

Author: David Kotok, Post Date: August 12, 2016

As we reported in our Aug. 2 update on the Zika virus outbreak (see http://www.cumber.com/zika-politics-democrats-republicans), the CDC has estimated that the cost of care for each child born with Zika-caused microcephaly will be as high as $10 million over a lifetime. And with the number of cases rapidly multiplying in the US and its territories […]

Report on Leen’s Lodge Gathering

Author: David Kotok, Post Date: August 11, 2016

Assembling 50 people in one place for developed discussions on economics, financial markets, and geopolitics is a tradition of the annual Leen’s Lodge gathering in Grand Lake Stream, Maine. This year’s group had an impressive array of issues to contend with. Fishing and weather were among them, in that the former was superb and the […]

Lies Politicians Tell Us

Author: David Kotok, Post Date: August 10, 2016

This marvelous text penned by Allan Meltzer is sent in the spirit of the current political campaign. We thank Allan for giving us permission to share this with our readers. The Hoover link is below as is his column. Lies Politicians Tell Us by Allan H. Meltzer Wednesday, July 27, 2016 Image credit: Barbara Kelley […]

BoE’s Carney Counters Brexit Headwinds

Author: Bill Witherell, Post Date: August 8, 2016

Last week the Bank of England (BoE) surprised markets by announcing a broader than expected monetary stimulus package. The BoE’s first rate cut in seven years, by 25 basis points to 0.25%, was not a surprise. Unexpected, however, was an early restart of quantitative easing. The BoE will buy an additional 60 billion pounds sterling […]

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Please feel free to forward our commentaries (with proper attribution) to others who may be interested.

For a list of all equity recommendations for the past year, please contact Thérèse M. Pantalione at 800-257-7013, ext. 315. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.

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