Diary of a Financier

Top Newsstuffs (April 28 – May 4)

In Bookshelf on Sun 4 May 2014 at 09:15

Derbying…

Quant study: Ten consecutive monthly higher-highs on $SPX | Paststat
Since 1950, there have been 22 occurrences in which SPX has hit a higher-high in 10-consecutive months as in 6/2013 – 4/2014.  Subsequent months’ average (mean) returns were as follows:
T+1     +1.87%   (72.7% wins)
T+2     +4.08   (81.8% wins)
T+3     +6.57   (95.5% wins)
T+4     +8.20   (95.5% wins)
T+5     +9.90   (90.9% wins)
T+6     +12.33   (100% wins)
T+12   +24.88   (100% wins)
[See also: Frequency of alltime highs indicative of secular bull market]
#Bullish #Signs of a bull market #Momentum (Momo)

List: The 100 rules for being an entrepreneur | James Altucher (Altucher Confidential)
Fantastic guide to help novices who’re trying to start & run a successful business. Some favorites:
C. Get your first customer before you start your business or raise capital
D. If you are offering a service, call it a product, because products are valued higher than services– Oracle claimed they had a database, but if you bought their database they would send in a team of consultants to help you “install” according to your needs; they really were a consulting company
P. Micro-manage software development, because nobody knows your product better than you do
TT. Have no friction for new user signup– e.g. no confirmation email
TTa. Make as much available as possible on a homepage/splashpage– minimize user clicks for their convenience
HHH. Give equity to get your first customer
III. Don’t worry about anyone stealing your ideas, ideas are worthless anyway
Q&A- How do I find a cheap programmer for hire? scriptlance.com, elance.com, or Craigslist; first freelance, then hire
[See also: Choose Yourself]
#Entrepreneur #Startup #VC

Rail traffic weekly: Trend continues acceleration as pent-up demand persists | Association of American Railroads (AAR)
Weekly traffic: +8.2% y/y
Growth ytd: +0.3pp @ +3.6%
Carload groups: 9 of 10 posted gains, including grain +39.3%, minerals +13.4, motor vehicles +10.6, petroleum +8.5; metals -0.7
[4th consecutive week prolongs rally after tough winter weather in January/February.]
#Bullish! $DBA $XLE $USO $UNG

NYSE margin debt & balances: Slight reprieve (March 2014) | Doug Short (dshort.com)
– Nominal margin debt (-3.3% @ $450B) drops from an alltime high
– Real margin debt finally relented, falling from an alltime high, although still in excess of 7/2007′s prior record
– Net margin balances (-$145.5B debit) also relent, rising off alltime lows, but still shattering even the Tech Bubble’s former record (-$123B) and crushing 2007 & 2011 pre-correction lows
[Given margin debt’s unfathomable highs and its historical correlation to SPX, this single variable could cause the market’s first correction since 2011 (19.4% drawdown); I’m watching retail participation in hopes of a handoff, although it’s unlikely to be a smooth transition.]
#Bearish #Euphoria

Purchasing Managers Index (April 2014): Global expansion slips | Business Insider
Global Manufacturing PMI (-0.5 @ 51.9) decelerates, but remains in expansion:
Australia (-3.1 @ 44.8) still struggling after YE13 crash, with new orders leading everything lower
Japan (-4.5 @ 49.4) crashes due to much feared sales tax increase
China’s official PMI (+0.1 @ 50.4) edged higher again & unofficial (+0.1 @ 48.1) stems its collapse
– The rest of Asia’s dipping too, including South Korea (-0.2 @ 50.2) & Taiwan (-0.4 @ 52.3), but Vietnam (+0.8 @ 53.1) hit an alltime high
Eurozone (+0.4 @ 53.4) expansion in tact, led by Germany (+0.4 @ 54.1) & Italy (+1.6 @ 54.0), with France (-0.9 @ 51.2) & Spain (-0.1 @ 52.7) decelerating slightly
UK (+1.6 @ 57.3) still a global leader for 13th month
Brazil (-1.3 @ 49.3) dives into contraction & 9-month low
US ISM (+1.2 @ 54.9 v 54.7e) rises again with new orders (unch @ 55.1), production (-0.2 @ 55.7) steady after last month’s massive bounce out of a ytd slide, inventories (+0.5 @ 53.0), deliveries (+1.9 @ 55.9), exports (+1.5 @ 57.0) & employment (+3.6 @ 54.7)
[Great US report made even better within context of Q1 GDP advanced estimates, which had a massive drag by private inventory reductions (-57bps off GDP growth rate) & exports (-100bps). See also: US ISM Non-manufacturing (Services) (+2.1 @ 55.2)]
#Bullish

Photos: The 60 most powerful pictures that capture the human experience | Distractify
#Emotion

Video documentary: “Coming Home” | E:60 (ESPN)
Emotional story of Harvard alumns Dominic Moore & Katie Urbanic, who traveled the US together through Dom’s journeyman hockey career, until they married and decided to set roots somewhere.
They bought a house in Cambridge, MA, and Katie immersed herself in the renovation.
Shortly after, she was diagnosed with liver cancer. Dom quit hockey for 2 years to be with Katie for her fight, which culminates with a return home from the hospital to find their family finished their house’s restoration.
[Dom returned to NHL, currently playing for New York Rangers.]
#Existential

–Romeo

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  1. […] higher-high in all 10 consecutive months. Since 1950, there have been 22 such occurrences, and the subsequent average (mean) returns suggest an overwhelming probability that $SPX will post meaningful gains over the coming months […]

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