Tick By Tick Research Comment - 13 Economic Tales To Take You Into 2013
As Bollinger question why their sales have dropped off a 'cliff' (excuse the pun), since London's LIBOR traders find themselves looking for a career change, the rest of the investment community continue to act with the confusion and irrationality that fuel the modern markets. S&P 2000, 3000 or even 10 000 - seemingly anything has become possible as the powers that be finally commit to full debt monetisation to preserve the worlds over-leveraged, under-funded and wounded economy.
"When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion"
Despite all the doom and gloom, here at Tick By Tick, we are here to provide an air of rationality and guidance to help keep your feet on the ground . As a result, we feel obliged to provide you, the loyal reader, with a seasonal present of our own. (Drumroll please). I would like to present Tick By Tick's 13 Economic Tales to Take You Into 2013
1. Being long the US markets (SPX, NDAQ, DJIA and Russ 2K) vs. the PIIGS (PSI 20, MIB, ASE, ISEQ and IBEX) YTD would have only resulted in 14bps of outperformance (1206 bps vs. 1192 bps)
2. When comparing Jan-Jun of 2011 vs. 2012 in terms of Futures trading volume, total volume has fallen 10.2%. More interestingly, PM volume was up 32.8% vs. Equity Indices at -14.4% despite both essentially delivering no gains over the period
3. Between 2007 and 2010, the US birth rate fell 8% to 63.2 births per 1000 women – this includes a 23% drop in the Mexican birth rate over the same period. These new figures have seen the US fertility rate drop below population stagnation rate of 2.1 to 1.9 children
4. Despite 10s of thousands of individuals reading the Gartman Letter on a daily basis, should you have invested in his Horizons ETF since its inception, you would be lagging the SPX by 50%
5. The largest two Global brokerages (MS and GS) were 253 and 170 SPX points away from the current level of 1420 in their 2012 predictions. Following their advice would have cost you 17.8% and 11.9% respectively
6. If being married was a requirement of voting in the US Presidential election, Mitt Romney would have won 56-42. Instead, due to the American demographic, Obama retained power due to the proportionately high unmarried population voting 62-35 in his favour.
7. If the economies of the US and Chile were compiled into audited accounts, every fundamental investor would pick Chilean debt as comparatively better purchase. Despite this, the 10yr yield spread is 372bps and US Treasury allocations are near historic highs
8. Whilst John Paulson, founder of Paulson & Co, basked in the fame of making +600% during the last financial crisis. A relatively unknown individual named Andrew Lahde, founder of Lahde Capital Management, generated returns in excess of 1000% before closing his fund and using his 5 minutes of fame to remind the world of the idiocy that surrounds the global Hemp market
9. Despite running a trade surplus, having a full funded pension liability and complete energy independence, investors prefer to hold the US dollar, which offers none of the above, over the Norwegian Krone that offers all of these characteristics
10. On December 6th Apple lost $35bn in market capitalisation, that is 5.5x the total market capitalisation of Research in Motion who previously controlled 44.5% of the Smartphone market in 2008
11. On May 4th 2012, Michael Pachter from Wedbush was the first bullish analyst on FB providing a $44 price target following the IPO. Six months later on 6th November, FB traded at $22, exactly half of his target
12. Those who believe that a cashless society is inevitable have been labelled conspiracy theorists, yet Mastercard, Visa and AMEX are up 120%, 150% and 33% over the last 2 years.
.. ...and finally
13. In the UK, houses with the number 13 are, on average, 2% cheaper than the identical houses either side of them
Before we leave you to question the logic in the facts set out before you, as the founder of Tick By Tick, I would like issue a small apology to my loyal reader-base who have found Tick By Tick market comments absent from their inboxes for the last 6 months. Big changes - that will be explained in my future insights - are coming that will ensure this is a Black Swan event rather than the norm.
Thank you for the continued support and a Happy New Year to you all.
*All figures correct at time of writing
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