Jeffrey D Saut's Contributions

“Rocky Horror Picture Show” was a satirical film production done as a tribute to the science and horror “B” movies of the late 1930s through the 1970s. I was reminded of the flick last week when one portfolio manager I saw...

The transition from one year to the next is always accompanied by a whole host of traditions intended to help people celebrate this annual new beginning. The resolutions, parades, fireworks, football games, food, furniture sales...

While investors’ attentions were focused on last week’s economic reports, new highs in various indices and Christmas, the proverbial tree in the forest fell and was not heard. Verily to a cornered Vladimir Putin, who is feeling the pressure of a crude oil and Russian...

In this business it has been said, “Sometimes knowing the right question is more important than actually knowing the answer.” Over the years I have found that old Wall Street axiom to serve me well.

In past missives I have discussed why I do not believe the Cyclical Adjusted Price Earnings Ratio (CAPE) is a good measure of valuations. The problem is that the CAPE uses a 10-year backward looking average of earnings.

I will tell you there has only been one false signal from Dow Theory (DT) over the past 15 years and that was a false “sell signal” generated by the Flash Crash in May of 2010; and, that was quickly reversed with a “buy signal.”

Evidently, the “lucid dreamers” on Wall Street practiced their skills two weeks ago as professional traders were sneaking large “buy orders” into the equity markets on the closing bell. Simultaneously, the Commitment of Traders’ Report showed those same traders were dramatically reducing their “short sale” bets.

Is the public wrong all the time? The answer is decidedly, “No.” The public is perhaps right more of the time than not. In stock-market parlance, the public is right during the trends but wrong at both ends!

I recalled those words from my friend Shad Rowe, who is the eagled-eyed captain of the Dallas-based money management firm Greenbrier Partners, as I listened to Janet Yellen's testimony last week. Ms. Yellen was opining that the action in social media and biotech stocks is reminiscent of what Shad was warning about in Forbes magazine 23 years ago.

While I was in the Pacific Northwest and Canada most of last week, I did have the privilege of listening to J.P. Morgan’s (JPM/$55.80/Strong Buy) Chief Market Strategist last Monday. Dr. David Kelly has long been known for his keen insights on the equity markets...

By the time the 2nd quarter was complete 2014 was in the process of being transformed from a flat year for risk assets and a strong year for fixed income into a much more encouraging year for the former and perhaps less so for bonds. Indeed if the SPX index were to simply replicate its first +6.05% half performance...

Last week the Volatility Index (VIX/11.26) tagged 10.34 on an intraday basis for its lowest reading since late 2006 and early 2007. I wrote about that occurrence in Thursday’s Morning Tack by noting...

Importantly, I am always trying to manage the “risks” inherent with investing (or trading), for as Benjamin Graham stated, “The essence of investment management is the management of risks, not the management of returns.

I recalled this quip by Jeff Daniels from HBO’s hit series The Newsroom while taking last week off to think about recent events because I feel like I am living in Bizarro World. First named "Bizarro World" in DC Comic books, the term has come to mean a situation or setting that is weirdly inverted or opposite of expectations.

I generally do not get too surprised, but this year has been the exception. I have been surprised by the stunning drop in the yield on the 10-year Treasury note, which has fallen from roughly 3% at year’s end to a yield yelp low of 2.4% last week.

Ladies and gentlemen, the computer has no possibility of foreseeing things that may occur ... especially out-of-the-blue events (black swans) that catch humans by surprise. Certainly you can feed a computer historical data and set up a series of “what ifs” for potential happenings based on past experiences.