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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (18326)	7/12/2016 1:12:59 AM
From: John Pitera	3 Recommendations Recommended By 3bar Hawkmoon The Ox Read Replies (1) of 33421

S&P breakout or fake out? 6 Hours Ago Carter Braxton Worth, Cornerstone Macro, goes to the charts to break down the recent rally in the S&P 500. watch the video of the 6 major US asset classes over the past year, their rates of return and the sharpe ratio risk associated with the higher beta of asset classes such as WTIC http://video.cnbc.com/gallery/?video=3000533348 Carter Braxton Worth with a really excellent synopsis that equities have been outperforming US Fixed income market....... the expert asking Carter a question and stating that we have been in a 5 decade rally in bond prices..... does not even know his markets well enough to understand that we are coming up to the 36 year equilibrium point which encompasses the 36 year period from 1946 until oct 19th 1981 when bond prices fell and interest rate rose and then the more recent season (cycle) where bond prices have had a bigger bull market than equities and interest rates have fallen. The rate of return of 30 year US bonds the 20 year returns of 20 year returnsover the past 20 years the S&P 30 year bond return has been 319% and it has outperformed the SPX total return of S&P 500 index by 85%...... the total return has been 219% and when the Sharpe ratio and the much greater beta and draw downs over the last 2 years increases the outperformance of bonds by a doubling of the percentage price outperformance. of course this is looking in the rear view mirror The SPX has not been able to make a new high in real terms (inflation adjusted) since 2000. There has been no upside since the secular bull market in equities that ran from 1976 to march of 2000 basis the SPX and from 1982 to March 2000 basis the DJIA. watch Carter's video it is quite compelling. With Active asset allocation methods and risk management approaches it is possible to create much greater Alpha..... or positiive asset class returns that are greater than the beta returns which are based on the swings (volatility) of the asset class. We have entered a time period where a holistic Global approach has to be used to look at the Different Asset classes that exist and are available to get greater returns from capital invested. With the Endgame of he EUR almost certainly going to break up over time as the solve northern countries exit, coupled with the Trillions of dollars of Negative yield sovereign debt going to for the major global governments, Sovereign wealth funds, Global Insurance and Re Insurance companies and Governmental and corporate pension funds .... this market set up will ultimately unleash vast changed in the way that a number of the Global asset markets are valued and create significant opportunities as well as risks for individual investors, Global Macro Asset managers and indeed society as a whole. This is nothing new... The changes in wealth that took place in the 1930's and then the WWII years was at least as momentous as what we are looking at. JJP

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