QE2 Creates Oppurtunities for Contrarian Value Investing

As always, John Hussman’s weekly market comment is a must read. In it he discusses what he sees as the driver of returns since QE2 was announced (essentially a transient psychological effect), the asset classes that have benefited and current valuation levels. All three areas are worthy of reading and further introspection but I will [...]

Weekend Reading

Quote of the Week: As commercials for Fram oil filters used to say, “You can pay me now or pay me later.” In our case today, “pay me later” is a perpetuation of weak banks, substandard growth, persistent unemployment and stymied productivity. Better to do takeunders of banks now than to hire an undertaker for [...]

Assets Returns Since QE2 Hints

A very nice interactive tool today from Reuters that shows asset returns based on different QE2 related time periods. Link. Notice how most assets rallied from the Jackson Hole speech until the official QE2 announcement and the USD declined. Since the actual announcement risk assets have sold off and the USD has rallied. Interesting that [...]

Hussman: Bubble, Crash, Bubble, Crash, Bubble…

Hussman’s weekly market comment is a must read. He does not mince words in arguing that QE is utterly misguided and Bernanke’s leadership at the Fed has bordered on criminal. Excerpts below (emphasis mine) but please read the entire comment. Given that interest rates are already quite depressed, Bernanke seems to be grasping at straws [...]

Sentiment Update: Significant Jump in Bearish Sentiment

The NAAIM (active money managers) sentiment survey was not released this week so we only examine the AAII (individual investors) survey in this post. AAII Individual investors’ outlook for the next six months decreased slightly from last week. Sentiment dropped from 51% last week to 48% this week. Bearish sentiment jumped to 29.8% from 21.6% last [...]