Bloomberg-Expect Markets to go Higher – Kotok (Radio)

Cumberland Advisors’ David R. Kotok says the moves we have heard on trade are lacking in substance, but the market has still been given some comfort.
Cumberland's David Kotok on Bloomberg Radio
He goes on to his expectations for a strengthening energy sector.

If you’ve enjoyed this exchange, please feel free to explore other interviews and conversations at the Cumberland Advisors website or YouTube channel.
Website: https://www.cumber.com/tag/radio-podcasts/
YouTube: https://www.youtube.com/CumberlandAdvisors


NOTE: 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.


If you like podcasts, check out this one from 2015 featuring David Kotok talking about his background and Camp Kotok with Barry Ritholtz. They also talk about the history of Cumberland Advisors since its founding, and delve into fundamental principles of investing and valuation.


Links here
https://itunes.apple.com/us/podcast/masters-in-business/id730188152?mt=2

And here
http://www.bloomberg.com/podcasts/masters-in-business/




Bloomberg-Interactive Brokers Studio hosts David Kotok on Markets and Investing (Radio)

Why we bought stocks before Labor Day weekend

David R. Kotok, Chief Investment Officer/Co-Founder, Cumberland Advisors, joined Lisa Abramowicz and Paul Sweeney for a Bloomberg-Interactive Brokers Studio segment on September 4, 2019. He discussed markets and the current investment outlook and he’s asked when investment managers should “dip their toe in or pull their money out.” David also talked about Cumberland Advisors’ quantitative work and the signals of panic and fear (see Matt McAleer’s & Leo Chen’s talk about that here: https://youtu.be/yir-3H2Dfxg).

This material that follows is excerpted from that interview with David.


Cumberland's David Kotok on Bloomberg RadioLisa –  As the market kind of jogs around this range and doesn’t really make a big move one way or another, there is a question hanging over investment managers, which is, when do they make a big move, when do they dip their toe in or pull their money out? Joining us now is David Kotok, Chairman and Chief Investment Officer of Cumberland Advisors. He joins us here in our Bloomberg Interactive Broker Studios. David, we love having you on. Thank you for being here. What are you doing at this point? Are you sitting on your hands, like everybody says they are, in terms of real money investment?

David –  Lisa, it’s always a pleasure. We’ve had a big change since the last time we talked. Last week we saw three rounds in our quantitative work on sentiment that was saying panic and fear is now rife in the markets, and that’s appropriate when you see the kind of headline risk we’ve had day after day. We became nearly fully invested in the US stock market in those selloffs. So I sit here today; and yesterday, when I had my head handed to me, having just gone in the week before, it was looking pretty bleak. Today looks a little better, but the fact is we make the case three ways. Fiscal policy is expanding. That’s a rising deficit; it’s going to be over a trillion. That’s a Trump deficit. Monetary policy is flat to easy. There isn’t a chance that interest rates go up in the United States for the next year. They go down or stay where they are. And the third one is the important one, because the entire distribution of US government debt is somewhere between, say, 1.5 and 2.0 percent interest rates; and the inflation rate in the United States is somewhere between 1.5 and 2.0 percent. If you put that together, it means the real interest rate in the United States is zero, which means money is free. Money free, loose monetary, loose fiscal, and 160 million people employed in the United States legally, with wages; and the wages are rising. Show me how you get to a big recession; I don’t see it. So, I don’t like the policy; I don’t like the trade war – I think it does a disservice to the nation and the world, and I think Navarro-Trump policy is wrong. But I have to be agnostic on policy and apply, as an investment professional, what I think is the right choice, and that’s what we did. Now we’ll find out if it’s good or bad, but we’re in a new place here.

Paul –  Yes, so of course what we’ve seen almost on a daily basis is the headline risk, which you talked about; and it brings you back to what seems to be the number one driver of daily fluctuations in the markets, which is the trade risk. So do you, from your perspective, have to put that aside and think longer-term, I guess?

David –  Well, we’re evolving a different position on trade, Paul. We used to think about this as a temporary phenomenon, and the markets played that for a year and a half. And the politics of it seemed to suggest it, but I think what has really happened is, what Trump and his policy have done, is permanently set back globalization and integration, which was at work for decades. The result of globalization and integration was a declining protectionist path – we have it – and more or less growing peace, although we had hotspots. We are reversing that. It’s a shame. What does it mean? It means we’ll have enclaves, geographically, instead of globalization. So you take the US, and you take Canada and Mexico, put them together and say that’s a North America enclave. You have another, and it will be China-centric. You have another, and it will be Europe, which is dealing now with this monstrosity of negative interest rates. But it’s a separate enclave.

And so, for us, the focus then is on this new world. We are going through what I think is a hundred-year flood, and it’s a major change. And if you try to play by the old rules, they don’t work. Good example, if I have another minute: If you take negative rates – there’s $17 trillion in negative rates (I know you follow that closely; Lisa especially follows bonds; she has for a long time) – so you say, okay, discount any asset with a negative interest rate, and the ultimate math says it’s worth infinity. Now we know that’s not possible. So all bond models don’t work when the duration is longer than the maturity. The bond model doesn’t work when you discount assets at these interest rates. You get prices which change behavior extraordinarily.

Lisa –  Okay. So all this kind of comes down to why you just shifted your money into equities. Is that correct? You shifted your portfolio?

David –  Well, that’s right. We took up the weight in equities. When the S&P 500 Index yield is higher than the 10-year Treasury, would you buy the 10-year Treasury with your money? My answer when that question comes to me is no.

Lisa –  Okay, but then I guess the flip side of that is, do you think that bonds are going to underperform, given that relationship, or do you think that stocks just need to rally a whole bunch more to sort of right-size everything, and then just returns will be lower going forward?

David –  I think bonds underperform in price as yields get restored, if we don’t have a global recession or depression, if we don’t repeat Smoot-Hawley. And in the mature economies – in the US, which is now 70 percent services – it’s not that likely. You can’t make that case so strongly, or at least I can’t. I hear it all the time: The world is coming to an end. Here’s a Kotok forecast: The world won’t come to an end. And if I’m wrong, you can tell me how wrong I am.

Paul –  So, David, are you thinking – what we’ve heard from some people is, it is perhaps a new world order, less global perhaps; but that suggests that global growth is going to be less going forward over the next 10, 20 years than it was over the prior periods.

David –  I think you’re right. I think, Paul, global growth slows because we have impediments to it now instead of assistance to it. You know, for me, this is tough. I spent my entire adult life in philanthropic work and geopolitical work with organizations devoted to globalization and integration, attaining peace and a higher standard of living worldwide. And it’s all coming apart. And the reason it’s coming apart is a misguided policy that originates in Washington. That’s awful. So, it’s hard, on the policy; but I sit with my partners at the firm, and I say, we don’t make this policy. Our job is buy, sell, or hold for a client. And now we have an entry, and we have an entry because the world looks so ugly and crazy.

Paul –  Right. Interesting. David Kotok, thank you so much as always for your comments. Very interesting takeaway, Lisa, is that Mr. Kotok is using the recent volatility, the recent weakness in the market to get a little bit more aggressive on the equities side.

Lisa – I think it’s really poignant that he said this is a hundred-year flood, that this is, sort of, turning a lot of fundamental assumptions on their heads. And what does that mean for how you look at investing and just in general how to call your perceptions? Really important outlook.

Paul – Yeah, it’s a different view and certainly one that makes a lot of sense, and it’s perhaps just recognizing how the markets have changed out there. David Kotok, Chairman and Chief Advisor of Cumberland Advisors, thank you very much for joining us and giving us your thoughts on the market.


If you’ve enjoyed this exchange, please feel free to explore other interviews and conversations at the Cumberland Advisors website or YouTube channel.
Website: https://www.cumber.com/tag/radio-podcasts/
YouTube: https://www.youtube.com/CumberlandAdvisors


NOTE: 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.


If you like podcasts, check out this one from 2015 featuring David Kotok talking about his background and Camp Kotok with Barry Ritholtz. They also talk about the history of Cumberland Advisors since its founding, and delve into fundamental principles of investing and valuation.


Links here
https://itunes.apple.com/us/podcast/masters-in-business/id730188152?mt=2

And here
http://www.bloomberg.com/podcasts/masters-in-business/




Bloomberg P&L Podcast: Boris Johnson, AI, Fed with John Authers, David Kotok, and others

Bloomberg P&L Podcast: Boris Johnson, AI, Fed with John Authers, David Kotok, and others

John Authers, Senior Editor for Bloomberg Markets, will discuss why U.K. Prime Minister Boris Johnson’s Brexit strategy is in tatters after UK government loses majority in parliament. David Kotok, Chairman & Chief Investment Officer at Cumberland Advisors, on markets and current investment outlook. Chris Condon, Federal Reserve Reporter, will discuss what’s a busy day for Fed speakers, and also why Boston Fed President Eric Rosengren is unconvinced the central bank needs to cut interest rates at this month’s Fed meeting. William Quigley, CEO of the WAX (Worldwide Asset eXchange) and co-founder of Tether, discusses issues surrounding Facebook’s Libra and why blockchain apps aren’t being adopted.

Running time 29:16

Cumberland's David Kotok on Bloomberg Radio

This is a Bloomberg podcast.

LISTEN TO PODCAST HERE: Bloomberg Audio

NOTE: 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.


If you like podcasts, check out this one from 2015 featuring David Kotok talking about his background and Camp Kotok with Barry Ritholtz. They also talk about the history of Cumberland Advisors since its founding, and delve into fundamental principles of investing and valuation.


Links here
https://itunes.apple.com/us/podcast/masters-in-business/id730188152?mt=2

And here
http://www.bloomberg.com/podcasts/masters-in-business/




Yahoo Finance Highlight: David Kotok on why washing machines are an important reference point in the trade war

Yahoo Finance Highlight: David Kotok on why washing machines are an important reference point in the trade war

 

Yahoo Finance - David Kotok discusses trade war

Watch the embedded video from Twitter & Yahoo Finance below.

 


 

 


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.




Cumberland Advisors Market Commentary – The Bond Conundrum and How to Manage

The past couple of weeks have been breathtaking for bond investors and observers of the bond market. The yield on the 30-year Treasury bond is now at a record low – it dipped under 2% this week – and the 10-year Treasury is not far off its record low of 1.36% set in July 2016 – the yield now sits at 1.53%. With a little more than two weeks gone in August, we have seen the 10-year drop 47 basis points and the 30-year 53 basis points. This is more movement in two weeks than we sometimes see in six months.

 

There are many crosscurrents here. Most pundits are using the inversion of the yield curve as a forecast of a slowdown. But as we have noted in other pieces, economic slowdowns are far from synchronous with inversions. Growth continued for a year and a half after the yield curve inverted in 2006.

Looking at recent economic data, it’s pretty hard to find the slowdown:

– Retail sales advanced 0.7% month-over-month in July, versus an expectation of 0.3%.

– The Empire Manufacturing Index (New York survey of business conditions) advanced 4.8% versus an expectation of 2.0%.

– Core CPI is 2.2 % over the trailing 12-month level – right where it was at the end of December when the 10-year bond yield stood at 2.685% and the 30-year bond yield was 3.01%.

– The S&P 500 and the Dow Jones are still up double digits this year – even after this week’s turmoil.

– Second-quarter non-farm productivity is at 2.3% vs. a 1.4% expectation.

This does not look like an economy that is rolling over. Nor is it.

This is a bond market that has been buffeted by a number of factors that are not US-related.

Europe is mired in negative interest rates. The wisdom of having negative interest is strongly debated. One thing that is pretty clear to us is that negative rates have not helped the European banking system, and negative rates here do not help US banks, either – witness how poorly financials have done since the Federal Reserve changed its tune towards the end of last year.

The slowdown in China has pushed the yuan lower, and China’s growth rate has dropped. This has contributed to the rush into Treasuries. But we think there may be more playing out here, and it is symbolized by the protests in Hong Kong in recent weeks. Coming on top of the slowdown in Mainland China, the protests may herald the beginning of new freedom movements that the Chinese government will struggle to contend with.

How to manage bond assets
We continue to manage Cumberland total-return bond assets in a barbell method, accenting both shorter-term securities for liquidity and longer-term bonds to lock in yields, with what have been non-Treasury securities in the taxable world and longer tax-free bonds in munis. Indeed, with the fast rush down in Treasury yields, longer-dated munis, though at historical lows, offer value when you can get 3% higher grade in a world where long Treasuries are at 2%. We will take our chances with 160% yield ratios, knowing that defensiveness is built into the cheapness. The front end of the muni curve is VERY expensive relative to Treasuries, so even with a barbell and very low nominal yields, it’s been prudent to have exposure to the longer end of the market.The barbell strategy works less well when the Fed is at the end of a hiking cycle. We don’t believe the Fed is done yet: This is a pause in the Fed’s addressing the US economy. For all the change in talk from the Fed’s being on autopilot to now being data-dependent, the Fed has raised the fed funds target by 25 basis points in December and lowered it by 25 basis points last meeting; so from a fed funds target standpoint we are where we were last fall.

 

Equity markets are decently higher, and our economy continues to improve, yet the bond market has seen yields come down dramatically, in a manner that doesn’t square with US data but is more sympathetic towards the slower growth in Europe and China.

The trade war and concerns about slow growth notwithstanding, the US economy continues to do well. Our thoughts are that this race to the bottom in yields will slowly give way to a recognition that the US economy is on firm ground; the force of higher wages will push inflation higher; and the Fed will resume – albeit slowly – addressing the US economy. This is why Chairman Powell gave the markets a rate cut of only 25 bps last meeting though the markets were clamoring for 50.

Bond market yields here are high versus those in Europe, and that will keep a lid on things for a while. But the rush down has been overdone, in our opinion. My colleague David Kotok often likes to quote Herbert Stein, former chairman of the Council of Economic Advisers under Presidents Nixon and Ford. Stein’s commonsense “law” was that “If something cannot go on forever, it will stop.” We feel that’s true with long bond yields. The ride down in yields has helped portfolios. But backups can hurt, which is why we continue to get more defensive at the margin. The barbell is still in place.

John R. Mousseau, CFA
President, 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.

Sign up for our FREE Cumberland Market Commentaries

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.




Yahoo Finance Highlight: FAANG stocks hit hard by U.S.-China trade war

Yahoo Finance Highlight: FAANG stocks hit hard by U.S.-China trade war

August 6, 2019

FAANG stocks hit hard by U.S.-China trade war

Watch the embedded video from Yahoo Finance below.

Tech stocks take a beating as the trade war drags on. Yahoo Finance s Julie Hyman, Adam Shapiro, Sibili Marcellus and David Kotok of Cumberland Advisors discuss.

 


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.

Sign up for our FREE Cumberland Market Commentaries

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.




Trump’s trade war with China is starting to get out of hand

Trump’s trade war with China is starting to get out of hand

Market Commentary - Cumberland Advisors - Currency Risk Quote (David Kotok)

Excerpts below.

By Matt Egan, CNN Business
Monday, Aug 5th 2019

New York (CNN Business)The US-China trade war has always been serious. Now it’s starting to get scary. China allowed its currency to drop sharply on Monday to the weakest level in more than a decade. And China announced its companies have halted purchases of American agricultural goods. This comes after US President Donald Trump vowed last week to impose tariffs for the first time on a wide swath of US consumer goods from China.
 
China’s currency move raised the specter of a currency war, where major countries race to devalue their respective currencies.
 
“It’s the currency risk that is the most volatile, hardest to see and the fastest reacting,” said David R. Kotok. “That’s the left hook that can knock out the boxer.”

 

Read the full article here: CNN Business


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. Sign up for our FREE Cumberland Market Commentaries 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.




Cumberland Advisors Market Commentary – Rocky Mountain Summit

Four states – CO, WY, ID, UT – in six days; private professional meetings, a few public gatherings, two Chatham House roundtables, and one half-day with a fly rod.

My longtime friend Bill Dunkelberg and I brought nearly 40 trout to the net for release. An equal number escaped the net during the fight. Here we are after the four-hour marathon.

David Kotok & Bill Dunkelberg
The location was Trout Ranch in Idaho, a few miles from Afton, Wyoming. Hosting was the Bronze Buffalo Club. They partner with the Global Interdependence Center for the Rocky Mountain Summit. The public presentations at the Summit are posted on the GIC website, https://www.interdependence.org/ . Below is this photo of a spawning rainbow trout (notice the shape of the jaw along with the glorious coloration), I will bullet the takeaways from the Chatham House discussions.

David Kotok & Fish
Before I get to money and markets, let me quote one paragraph from Kyle Westway’s weekend missive #283:

“Imagine a world in which priests only make their money by selling access to what you said in the confession booth? That’s basically Facebook / Google’s business model. Except in this case, Facebook is doing that with 2 billion people and has a supercomputer that’s actually predicting the confessions you’re going to make before you make them. And it’s stunningly accurate. AI has been shown to predict our behavior better than we can. It can guess our political affiliation with 80 percent accuracy, figure out you’re homosexual before even you know it, and start suggesting strollers in advance of the pregnancy test turning pink. As each track leads to profit maximization, companies must become more aggressive in the race for attention. First it was likes and dislikes, making consumers active participants, causing them to feel as if they have personal agency within the platform. They do, to an extent, yet as the algorithms churn along, they learn user behavior, creating ‘two billion Truman Shows.’ Watch Tristian Harris – former Google design ethicist – speaking at a Congressional hearing (ironically on YouTube).”

I strongly recommend the 17-minute YouTube of Tristan Harris’s US Senate testimony. The link is at the end. Think of this two ways: What it indicates for society and social behavior, and what it means for regulation, supervision, and legal changes applied to social media businesses.

Here is the link to his testimony: https://www.youtube.com/watch?v=WQMuxNiYoz4 .

Let’s get to takeaways from the week in the West, where we encountered publicly and privately owned businesses and wealth running to trillions of dollars. Many of the decision makers who participated in our gatherings have 8- or 9- or 10-figure personal wealth. All conversation was conducted under the Chatham House Rule.

Bullets

1. Trade war – No one is able to predict outcomes now, so capital investment is being deferred. Some tariff cost passthrough has started. The lead-to-lag timing of trade war effects is about a year, between a Trump sabre rattle and an actual outcome. What we see today in sales, prices, and other trade war impacts is the result of last year’s trade and tariffs policy. This delayed impact portends poorly for the next year or so.

2. China – Most folks see the unfolding generation as one of protracted adversity. They characterize the US-China negotiations as a modern version of the Cold War of yesteryear.

3. The Fed – Never have I heard so much criticism and ridicule of the central bank. Voices that are direct but polite in public are intense and negative in private. Paul McCulley’s keynote alluded to rewriting the Federal Reserve Act. Richmond Fed President Barkin was a keynote, too. He sat politely through the other presentations. My guess is that he has a message to carry back to the Fed, which will include the need for the Fed to improve communication. I believe that improvement is essential, and my takeaway is that the Fed as we know it is at risk and that the peril from a political intervention by Congress is high and rising.

4. Negative interest rates – Negative rates in Europe and Japan are universally viewed as poison. Nearly all believe this experiment ends badly. No one knows when, and so all must speculate about how it ends as they make portfolio decisions.

5. Investments – Portfolio options discussed included real estate, timber, farmland, gold, other hard assets, tactical stock market plays, private equity, royalties, and some exotic structures, plus privately owned operations. Bill Dunkelberg reminded everyone that there are 30 million businesses in the US and only 20,000 trade on the stock exchanges. Half the US nongovernment economy is privately owned. A chunk of that half populated these meetings.

6. Politics – My guess is 70% or more of the group believes Trump will be re-elected. Few like him or his behavior, but most are willing to overlook it because of his policy outcomes on taxes and deregulation. Trade war escalation and a recession would change this. Most believe Trump knows that and will avoid those pitfalls. Most believe the Democrats haven’t produced a viable alternative to Trump. If one does emerge, many would consider that option. In one forum of 25 people, only two thought Biden would be the nominee. Some noted how at this stage in the previous election Hillary Clinton was not yet on many people’s radar screens, and Trump was dismissed as impossible. A few mentioned de Blasio or Castro as possible emerging names. Harris comes into the Super Tuesday fight with a California basket of delegates. Anyway, lots of speculation, and the only majority view was that Trump gets re-elected.

7. Stores of value – The last takeaway is about money, whether euro or dollar or yen. All agree it is still functioning as a medium of exchange and a unit of account – we pay and receive fiat money, whether via paper or electronic paper or interpersonal Venmo transfers. But many believe the store-of-value characteristic of money does not reside with fiat currencies. The debate does not concern whether this is true, but instead where store of value does reside. Gold is an increasingly acceptable option. Bitcoin has little history. SDR anchorage hasn’t caught on. Few respect a small group debating monetary policy around a table in the Marriner Eccles Building as a reliable way to ensure that fiat money stores value.

On this last point the world’s central bankers are failing. They ARE clearing payments. They ARE facilitating government deficits, and they ARE trying to avoid recessions and default meltdowns. But in so doing, they ARE losing the trust and confidence of their constituents. In my view that trade-off is dangerous. The store-of-value characteristic of money started with the Athenian “owl” 2400 years ago. History shows that things ended badly every time a monetary authority lost sight of that store-of-value attribute.

Thank you to the Global Interdependence Center and the Bronze Buffalo Club for an enlightening week.

Final note. All fish were released. All hooks were barbless.

Lastly. Cumberland has some cash reserve. Our US ETF portfolios include an overweight position in the gold miner ETF.

David R. Kotok
Chairman of the Board & Chief Investment Officer
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.

Sign up for our FREE Cumberland Market Commentaries

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.AAA




Cumberland Advisors Market Commentary – Osaka and the DMZ

Ceasefire:  An agreement to temporarily stop shooting while trying to reach a truce

Market Commentary - Cumberland Advisors - Xi & Trump

Truce:  A more durable cessation of shooting while antagonists attempt to reconcile differences and reach a peace treaty

Treaty: An agreement which is then memorialized and signed by both sides

The US and China seemed to have tentatively achieved a treaty when Xi visited Trump at Mar a Lago. Then more shooting started.  The US and China had a truce after Buenos Aires, or so it seemed. Then more shooting started. Now after Osaka we have a ceasefire. We shall see. Here is a Bloomberg analysis of each side’s ceasefire position: https://www.bloomberg.com/news/articles/2019-06-29/u-s-china-trade-truce-side-by-side-comparison-of-statements .

The US and North Korea have had a ceasefire for decades. It has been occasionally broken by shooting. We don’t have a truce, only optics. Will there be a truce? We shall see.

A stock market relief rally because of an Osaka ceasefire will also see a likely reduction in Fed rate-cut expectations. How do these two things balance each other? We shall see.

Meanwhile, we still have some cash reserve in our US stock market ETF accounts.




U.S. Trade Representative is grilled on Capitol Hill about China and Mexico

U.S. Trade Representative is grilled on Capitol Hill about China and Mexico

June 18, 2019

Yahoo Finance - David R. Kotok - U.S. Trade

President Trump’s top trade negotiator Robert Lighthizer was in the Congressional hot seat today facing tough questions from lawmakers on trade and tariffs. Rick Helfenbein, American Apparel and Footwear Association CEO, joins Yahoo Finance’s Julie Hyman and Adam Shapiro, Cornell Capital’s Ann Berry and Cumberland Advisors Chairman David Kotok to talk about the latest trade headlines.

“The tariff wars create winners and losers. You just hear from losers. They’re worried. With good reason. There are no tariffs on the healthcare sector. You can’t name them. It’s 18% of our GDP. In our portfolios, we’re overweight in the healthcare sector. Why? Do we want this tariff war? No. But as a portfolio manager and investment advisor, you have to pick and choose. And tariff wars by definition pick winners and losers and they have unintended consequences. And we’re just seeing the unintended consequences revealed now,” says David R. Kotok.

Watch at Yahoo Finance or in the embedded player below.