Cumberland Advisors Week in Review (Nov 26, 2018 – Nov 30, 2018)

The Cumberland Advisors Week in Review is a recap of news, commentary, and opinion from our team. These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.

Week In Review

MATT MCALEER’S WEEKLY RECAP

Matt gives us the latest from the Equity Desk In this Week In Review for November 26-30, 2018. Our Director of Equity Strategies for Cumberland Advisors tells you how he’s trading and shares some forward thinking. WATCH HERE.

Cumberland-Advisors-Matt-McAleer-Market-Position-Broadly


 

MARKET COMMENTARY

 

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FEATURED VIDEO


John Mousseau joins Matt McAleer this week for a discussion about his week in bonds.

The video is available here.


IN THE NEWS

 

 

 

 


IN CASE YOU MISSED IT

 

    • Bitcoin price WARNING: HILARIOUS moment investor compares cryptocurrency to CHOCOLATE COIN

      David Kotok 1/04/2018

      BITCOIN is as tangible as a chocolate coin a top investor has warned in a hilarious quip about the cryptocurrency. Appearing on Bloomberg, Mr Kotok offered the hosts a “New Year’s gift” – a chocolate coin shaped like a bitcoin. Handing out the sweet treat, he said: “I brought proof that bitcoin can be tangible, here’s a New Year’s gift for each of you.” The delighted presenters asked if the gift was chocolate. Mr Kotok said that the chocolate version of the cryptocurrency had more value than the real thing. He said: “That is a chocolate covered bitcoin, that is the most tangible value you will see in bitcoin.”Continued…

 

  • Europe’s Migration Crisis

    Bill Witherell 12/15/2015

    A European perspective on the complex societal challenges now confronting Europe as it seeks to address a humanitarian crisis and heightened security risks. A reader shares, “In every institution, including education, we take for granted that men and women will mix and work together. My friends’ children are off dating each other and staying over at each other’s houses. Think about this very specifically and you see that the whole basis of social organization will come under pressure if migration continues, or is allowed to continue, on the scale which seems likely. Think about business life, and you’ll see the same thing. The questions to ask are these: How many will come, or try to come, in the coming years? How will they try to live when they get here? What will the reaction of Europeans be? How will all this affect enterprise, investment, and credit ratings?” Continued…

 

 


 

UPCOMING EVENTS

 

    • Adapting to a Changing Climate

      From hurricanes to red tide and sea level rise, learn how a changing climate affects the Sarasota-Manatee region and the state of Florida. Expert speakers will discuss the challenges and impact on Florida and other coastal communities while uncovering the adaptive strategies that bring unique social and economic opportunities. The featured speaker is Bob Bunting, CEO Waterstone Strategies/Scientist/Entrepreneur – January 25, 2019 – Selby Auditorium, USFSM , 8:30 am – 3 pm. Lunch is included. Cumberland Advisors is a sponsor and Patricia Healy, CFA, from our firm will discuss “Climate, Municipal Bonds and Infrastructure” with the audience. Details Here.

 

  • U.S. Manufacturing in a Global Context

    Save the Date! GIC is returning to Sarasota, FL on Friday, February 1, 2019 to partner with the Financial Planning Associates of the Suncoast and Cumberland Advisors. Join us at the Sarasota Yacht Club as we welcome Bill Strauss, Senior Economist and Economic Adviser of the Federal Reserve Bank of Chicago, for a presentation on U.S. Manufacturing in a Global Context. Strauss is a senior economist and economic adviser in the economic research department at the Federal Reserve Bank of Chicago, which he joined in 1982. His chief responsibilities include analyzing the current performance of both the Midwest economy and the manufacturing sector for use in monetary policy. Details Here.

 


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Investors speculate on return of crisis-era Build America infrastructure bonds under split Congress

Investors speculate on return of crisis-era Build America infrastructure bonds under split Congress

This infrastructure-bond structure, backed by federal subsidies, could face uphill battle in Congress.

With Democrats sweeping into the House in the midterm elections, analysts are touting the potential comeback of crisis-era municipal bonds as part of a broader infrastructure bill.

Talk of major infrastructure legislation has gained ground as investors marked it out as the rare area where Democrats and President Donald Trump shared common ground. That has drawn speculation of the potential re-introduction of Build America Bonds, taxable municipal bonds issued by local governments to finance infrastructure projects, that came to life in 2009 when former President Obama launched a wave of fiscal stimulus measures to revive a recession-hit economy.

“It may be brought back in some form,” said John Mousseau, director of fixed income at Cumberland Advisors.

The need for infrastructure spending has been felt on both sides of the aisle.

Mousseau pointed to the strong demand for recent multibillion dollar bond sales funding a new terminal in New York’s LaGuardia airport and a replacement for the Tappan Zee bridge, both of which relied on a mix of taxable and tax-exempt municipal debt.

“Big deals have had no problem selling bonds,” said Mousseau.

Continue reading at MarketWatch’s website: www.marketwatch.com




Midterm Elections – The Quick Muni Note

Here’s our first take after the midterm elections.

Market Commentary - Cumberland Advisors - Midterm Elections – The Quick Muni Note

The polls actually got it right, with the Democrats taking the House of Representatives and the Republicans enjoying a slight pickup in the Senate.

Divided government, with different parties in control of the House and Senate, has sometimes led to gridlock.  It also tends to keep spurious legislation from being passed; and so overall, markets are OK with this outcome.

 

Regarding munis, we feel that this election certainly eliminates the concern that a Republican House would have introduced legislation to cut income taxes further.  With the Dems in control of the House, that notion is off the table; and fears that tax-exempt munis would suffer price erosion from lower marginal tax rates should dissipate.

From a spending standpoint, the divided Congress will most likely keep the President’s spending in check, and this may slow the current rise in the deficit (a good thing from our perspective).

We’re still checking final results, but we know that California voters rejected almost $9 billion in bonds for water projects, and Colorado rejected over $3 billion in a transportation bond.  There’s more to come on this issue of bond rejections, but our thought is that the specter of the SALT provisions of last year’s tax bill is forcing voters’ hands. If state income taxes and local property taxes are no longer deductible, anything that raises the level of spending and potentially higher taxes is likely to get a cold shoulder, as people’s EFFECTIVE taxes will rise in any case with SALT provisions.

We do believe that with the current low unemployment level, a national infrastructure program with federal subsidies is not needed and is now more unlikely with divided government.  We have seen large infrastructure bond deals done in the past year in the municipal market, and the issuers have had no problem selling the bonds.

Coming out of the elections, we feel especially constructive about longer-term tax-free bonds. With longer tax-free munis yielding over 4%, and with a taxable equivalent yield of 6.35% and muni/Treasury yield ratios of almost 120%, we feel longer tax-free paper is a real bargain and continue to manage portfolios in a barbell fashion, with longer-maturity bonds being a focal point.

The large December and January reinvestment periods are almost upon us. Supply is running 15% behind last year, and that will be another positive force for the market, along with the core inflation rate, which has been dropping for two months.

More to come.

John R. Mousseau, CFA
President and Chief Executive Officer, Director of Fixed Income
Email | Bio


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

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MOUSSEAU: The Cumberland World Series Theory of the Bond

Most investors have heard of the “Super Bowl Theory of the Dow.” This theory, first proposed by sportswriter Leonard Koppett in the 1970s, according to Wikipedia, posited that when a team from the “old” NFL (the current NFC, plus the Colts, Browns and Steelers, who joined the AFC in 1970) won the Super Bowl, the Dow Jones Industrial Average would advance in the year following the game. If a team from the AFC won the Super Bowl, the Dow would decline.

Amazingly, this theory has worked out almost 80 percent of the time, though the February 2017 Super Bowl, won by the Patriots (AFC), did NOT accurately predict the stock market (up in 2017).

The correlation, of course, is just a coincidence: There is no connection between a conference winning the Super Bowl and subsequent returns in the stock market, and thus there is no reason to think that the Super Bowl can be used to predict markets.

Read the full article at the Sarasota Herald’s website: www.heraldtribune.com

Or read the full commentary here: www.cumber.com/the-cumberland-world-series-theory-of-the-bond/




Why Company Insiders are Selling Off Their Stock At Record Rates

Why Company Insiders are Selling Off Their Stock At Record Rates

Executives are cashing out. TrimTabs Investment Research reveals $5.7 billion dollars of stock sold by executives in September this year, a ten-year record. Similarly August reached a ten-year record with over $10 billion in stock sales. May and June saw $8.2 and $9.4 billion sold respectively.

It becomes very easy to see sell-offs by executives are accelerating through the year. In the second quarter of this year, massive stock buybacks were announced, $436.6 billion worth of them in fact. So many buybacks occurred some companies even borrowed money to make it happen.

John Mousseau, President and CEO of Cumberland Advisors, said in July of 2018 that “They’re buying back from the front door, and shoveling shares out the back door. It would be like going on TV to tell everyone what stocks we like, and then selling them.”

You can read the rest of the piece at the hadeplatform.com website.




CEOs are dumping stock in their companies. Here’s what that means

The captains of Corporate America are steering a record amount of cash into stock buybacks.

Companies have announced them this year at a rate of more than $5 billion a day. The buyback boom has been viewed by investors as a sign of confidence among CEOs.

“They’re buying back from the front door, and shoveling shares out the back door,” said John Mousseau, president of CEO of Cumberland Advisors, an investment firm that manages more than $3 billion.

“It would be like going on TV to tell everyone what stocks we like, and then selling them,” he said.

Read what else John has to say about stock buybacks at CNN’s website: https://money.cnn.com




Cumberland Advisors Names Mousseau President and CEO

Excerpt below:

As Cumberland Advisors celebrates its 45th Anniversary this week, eight years after moving its principal office from Vineland, NJ, to Sarasota, FL, the firm has announced the implementation of its long-considered succession plan. David Kotok, co-founder, remains chairman of the board and chief investment officer while transferring the day-to-day responsibilities of running the firm to John Mousseau, who has been elected president and CEO of Cumberland Advisors.

 

Read the full newsletter here: https://www.srqmagazine.com/srq-daily/2018-06-20


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

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John Mousseau, CFA® Becomes President of Cumberland Advisors as Firm Celebrates 45th Anniversary

It is with pride that Cumberland Advisors celebrates its 45th Anniversary. June 18th marks 45 years since Cumberland Advisors officially opened its Vineland, NJ, office. Eight years after moving our principal office from Vineland to Sarasota, FL, we have 45 employees, and as of April 30th, 2018, more than three billion dollars of client investment funds under management in separate accounts. Cumberland’s growth and stability are substantial, with record assets under management and a largest-ever, talented staff. The firm’s future looks bright.

John Mousseau

Just as significantly, Cumberland Advisors announces the implementation of a long-considered succession plan. David Kotok, co-founder, remains Chairman of the Board and Chief Investment Officer while transferring the day-to-day responsibilities of running the firm to John Mousseau, who has been elected President and CEO of Cumberland Advisors. With over 30 years of investment management experience, Mousseau has been a member of Cumberland Management and longtime Director of Fixed Income at Cumberland for 18 years. He has an A.B. in economics from Georgetown University, a masters in economics from Brown University, and has been awarded the Chartered Financial Analyst (CFA®) designation. “Our firm has a great tradition of separate account management and personal service,” says Mousseau. “It is an honor to be elected president by our board of directors. I’m committed to maintaining the high standards of the past and to our continued growth.”

“The best way to insure the continuous delivery of a high level of quality service to our clients is to execute a well-thought-out succession plan,” David Kotok explains. “Many firms wait too long and become reactive to unfortunate events. At Cumberland, we want to be proactive, not reactive. I’ll continue as chairman and chief investment officer for the next three years and will gradually be helping the transition of each client relationship during that time.”

David Kotok

Cumberland Advisors is a registered investment advisory (RIA) firm headquartered in Sarasota, FL. The firm has a wealth preservation bias and conservative investment orientation to manage both risks and returns. Cumberland Advisors is a dedicated fee-for-service-only asset manager. The firm offers market knowledge, analysis, and management with low fees.

The firm manages fixed-income as well as equity accounts (using exchange-traded funds only). Our clients are individuals (direct clients as well as those referred by consultants), institutions, retirement plans, nonprofits, and government entities. Various investing styles are available, examples:

Equity: Cumberland Advisors actively manages domestic and international equity portfolios using exchange-traded funds (ETFs).

Fixed Income: Cumberland Advisors actively manages fixed-income portfolios through a full interest rate cycle. Our firm utilizes a disciplined approach to select high quality, investment-grade (A or better) liquid issues. Strategies include Total-Return Tax-Free Municipal Bond and Total-Return Taxable Fixed Income.

401(k): Cumberland Advisors manages 401(k), 403(b), and 457 retirement plans.

Charitable and Foundation Special Services: Cumberland’s professionals work closely with a nonprofit organization’s management team, investment committee, and board of directors to develop a customized Investment Policy Statement (IPS) and to construct an investment portfolio in alignment with the short- and long-range financial goals of the organization.

Cumberland Advisors’ portfolio management emphasizes long-lasting relationships and continuous personalized discussion among clients, their consultants, tax advisors, and the assigned portfolio management.

The value of the firm is rooted in the professionalism, integrity, expertise, and intellect of its people. In addition to John Mousseau’s election as President, Cumberland has implemented other significant changes. Cumberland has added new non-management shareholders, and the Board of Directors has expanded to nine members. New and expanded roles at the firm include: Daisy Lopez is a member of the new executive committee and remains Executive Vice President; Dr. Robert Eisenbeis remains Vice Chairman of the Board of Directors; and Phyllis Streit is a member of the new executive committee and remains Chief Financial Officer. Matthew McAleer is a member of the new executive committee and has been named Executive Vice President and Director of Equity Strategies; Dr. Michael McNiven has been named Senior Vice President of Business Development and National Accounts; and Patricia Healy, CFA®, has been named Senior Vice President of Research and Portfolio Manager.

Cumberland Advisors has 17 Series 65 registered professionals. “We believe this number of series 65 credentialed advisors adds a great deal to the professional level of this firm,” says Mousseau. “It speaks to the emphasis we place on professional skills.”

Earlier this year, Cumberland achieved independent verification of its GIPS (Global Investment Performance Standards) certification. This propels Cumberland into an elite group of money managers that commit to fair presentation and full disclosure of investment performance results.

Cumberland Advisors - 45th Anniversary

As Cumberland celebrates its 45th anniversary, these changes are designed to ensure that the quality, personal commitment, and competence to which clients have become accustomed will continue and indeed be enhanced. With a broad range of skills and experience, Cumberland is committed to providing the best possible service and strategic advice to clients without regard to whether they are individuals in direct relationship with us or clients who are introduced to the firm through their referring consultants and supporting professionals.

Additional information is available in Cumberland’s Form ADV Part 2 disclosure. It can be found on Cumberland’s website, www.cumber.com or it can be mailed upon request. Michael McNiven, at 800-257-7013, ext. 316, can answer questions about investment styles and platforms.

For further details, please communicate with us via www.cumber.com or call Sharon Prizant at 800-257-7013, ext 335.


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.




Financial firm names new president and CEO

SARASOTA — John Mousseau has been elected president and CEO of Sarasota-based financial management firm Cumberland Advisors.

John Mousseau, President and CEO of Sarasota-based financial management firm Cumberland Advisors

Cumberland, a registered investment advisory firm, is also celebrating its 45th anniversary in June. The company opened in Vineland, N.J. and moved its principal office from Vineland to Sarasota eight years ago. It has 45 employees and more than $3 billion of client investment funds under management.

“Our firm has a great tradition of separate account management and personal service,” says Mousseau in the statement. “It is an honor to be elected president by our board of directors. I’m committed to maintaining the high standards of the past and to our continued growth.”

Read full article at businessobserverfl.com

Read John’s bio here: http://www.cumber.com/team/john-r-mousseau/




Cumberland taps Mousseau as president/CEO

SARASOTA — John Mousseau has been elected president and CEO at Cumberland Advisors, the local financial advisory firm with more than $3 billion under management.

Cumberland co-founder David Kotok remains chairman of the board and chief investment officer in what the firm called a long-considered succession plan.

As Cumberland marks its 45th anniversary — the past eight years headquartered in Sarasota — Mousseau takes over the day-to-day responsibilities of running the firm. He has been a member of Cumberland management and director of fixed income for 18 years. He has more than 30 years of investment management experience.

“The best way to insure the continuous delivery of a high level of quality service to our clients is to execute a well-thought-out succession plan,” Kotok said Monday in a news release. “Many firms wait too long and become reactive to unfortunate events. At Cumberland, we want to be proactive, not reactive.”

Read the full article at the Sarasota Herald’s website: http://www.heraldtribune.com