Uncertainty Is Killing Me

"Uncertainty is killing me
And I'm certainly not asleep
Maybe I've gone far too deep
Maybe I'm just far too weak
And that's the last place I want to be, the last place"

The Fray - Uncertainty

July saw the stock market rally on the back of strong corporate earnings, and the bond market rally on fear of economic collapse. Can this dichotomy continue? Can corporate earnings continue to strengthen if the economy falls? What an unusual time, in fact you may call it "unusually unusual." In his recent testimony to Congress our esteemed Federal Reserve President, Ben Bernanke, called the economic outlook "unusually uncertain." While non-voting Fed President Richard Fisher said businesses are not committing to growth due to "unmanageable uncertainty."  And just yesterday voting Fed President James Bullard (a noted inflation hawk) stated that the Fed, "Must be prepared for a negative shock and be ready to expand the quantitative easing program through the purchases of Treasury securities." So the Fed, whose main job is to keep us all calm, is stating as calmly as possible, we're pretty certain that we are uncertain about this economic recovery, and since interest rates are already at zero we will probably seek to debase our currency again by buying a trillion or so of Treasury securities.

Yes, uncertainty is rampant, but the future is always uncertain. We live in a world where change is the norm. Our job is not to dwell in the past, but to live for today, and adapt for whatever tomorrow throws at us.

Investment management is really risk management, as the world changes the nature of risk changes. And since no one really knows what the outcomes of these changes may bring it is important to keep some powder dry for protection, as well as for those eventual opportunities. We may see protectionism emerge, or an increase in global unrest borne out of high unemployment, or even sovereign defaults on debt. We may also see none of the above. Good things can happen too. Whenever there are periods of high risk and uncertainty the performance correlation of most asset classes moves towards one, diversification becomes less useful, but opportunities arise. During periods of high risk, when nearly all asset classes move in tandem, we usually see the most lucrative opportunities emerge. We all must remain vigilant, but not blind to the opportunities. 

All of this uncertainty is not without a bright spot or two. First, we have record low 30 year mortgage rates of 4.59%, which is great if you are certain of your continued employment prospects. Second, the Fed has made it pretty clear that one of the causes of their uncertainty is the uncertain future of taxes, and that it would make a lot of sense to allow the Bush tax cuts to stay in place for at least another year. 

"Thousands were lost and maybe more
The question remains, "What is this for?"
Maybe it came unexpected
Maybe I'm left unprotected
And that's the last place I want to be, the last place"

Things were looking pretty bleak for equities in the first couple of days of July as the media and nearly all technicians pontificated on the "Death Cross". In technical speak the "Death Cross," or as I prefer the "Dark Cross," happens when a securities 50 day moving average crosses below it's 200 day moving average, signaling that the uptrend is broken and a new downtrend is on the way. It is said that Mr. Market has a very perverse sense of humor, and that any time the majority of investors believe something is going to happen he makes sure that it doesn't. That is exactly what happened in July, since as soon as the S&P 500's 50 day MA broke below it's 200 day MA, it reversed and rallied strongly, ending the month up  6.80%. Fortunately our indicators for the US equity market never quite broke down so we stayed invested and participated in the rally. For the year the S&P 500 is now down -0.17%. This rally was not the exclusive domaine of US equities, we also saw strong moves in international equities with EAFE up 11.61%, emerging markets up 10.21%, and international REITs up 10.01%. Most commodity indexes were up about 6%, but gold fell about -5.0%. 

The real story continues to be the Treasury market and it's rapidly disappearing yield. 2-Year Treasuries ended the month at a yield of 0.55%, while the 10-Year now yields 2.91%. You can get a 90 day jumbo CD to yield all of 40 basis points! Not only have yields plummeted in the treasury market, they have plunged in the corporate bond market (lowest in six years) and international fixed income markets as well. Our holdings in emerging market sovereign debt (EMB), and International developed market sovereign debt (IGOV) were up 4.05% and 5.52% respectively. The fixed income loser of the month was TIPS down -0.24%. 

Investment Considerations:

This week we had a couple of trades that reflect this dichotomy in the markets. First we went from neutral in emerging market equities back to bullish, and second we went from bearish in international developed market sovereign debt to neutral. This reduced our holdings in cash equivalents to 27.5%.

Where do we stand?

US Equities -- Neutral, but moving towards Bearish

Int'l Equities -- Bearish for EAFE and Bullish for emerging markets

US REITs -- Neutral 

Int'l REITs -- Bearish, but moving towards neutral

Gold -- Bullish, but moving towards neutral 

Commodities -- Bearish, but moving towards neutral

US Fixed Income -- Bullish, record highs and overbought

Int'l Fixed Income -- Neutral, but emerging market debt bullish

Cash Equivalents -- At 27.5%. Our 5% in Chinese Yuan getting a little lift. 

Be careful out there,

Chris Wiles

www.rockhavencapital.com

For prior Rockhaven Views visit:

www.rockhavencapmgmt.blogspot.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

    

Gimme Shelter

Oh, see the storm is threatening
my very life today
if i don't get some shelter
yeah, i'm gonna fade away

"Gimme Shelter" by The Rolling Stones

RocknRoll Hall of Fame HD -U2 Mick Jagger ...

Safe Money...Is There Such A Thing:

Most of my clients are a lot like me (scary thought, huh) they are just looking to preserve and protect their hard earned dollars from a world full of risks, in other words they're looking to "shelter" their money. This is exactly why I created Rockhaven, and have instituted our Global Tactical Asset Allocation program. The goal is simply to preserve and increase purchasing power over time. We use technical analysis to shift assets amongst nine separate investable markets, including cash. While this has been working admirably for the bulk of my assets (currently about 45%) I also have three other buckets where my wealth is "sheltered."

One, is simply a cash cushion. Cash as defined as money markets, checking, etc., that you feel comfortable holding. My cash holdings amount to about 15% of my net worth.

Two, is real estate (net of mortgages). My home and condo in the mountains account for about 20% of my net worth.

And Three, my municipal bond holdings, which make up the final 20%. 

Now there is no right or wrong mix, everyone has various levels of risk tolerance. Some may want more or less in cash, others may have much more in their homes, again there is no right or wrong number...we all have to find our own personal "shelter from the storm."

Back to Safe Money. Safety is a relative term, there is no such thing as risk free! All investments, even cash, have risk. Obviously cash/money market assets can be considered pretty safe, the biggest risk is inflation and the devaluation of the dollar. The other area I consider as pretty safe is my municipal bond portfolio. But not all municipal bonds are created equal, like all bonds they are only as good as the issuers ability to repay them. And obviously with the increased stress on many municipalities repayment risk has been on the rise. Municipal bonds predominately fall into two categories; general obligation, and revenue bonds. General obligation bonds are considered less risky because they are backed by the municipalities ability to tax. Revenue bonds are backed by the revenues generated by the issuer; utilities, parking fees, hospitals, etc.

I prefer owning municipal bonds outright as opposed to muni bond funds because, if interest rates rise over time, muni bond funds will fall in value while individual muni's will mature at par, and enable you to reinvest the proceeds at the new higher rates. 

In today's market, high quality Pennsylvania municipal bonds yield between 3.0% and 4.0%, depending on the maturity and issuer. If you live in PA these are double tax-exempt, PA and Federal. The PA tax rate is 3.07%, and most of you are probably paying 33% to 35% in Federal taxes (soon to be 36% to 39.6%). So a laddered (issues maturing in various years) portfolio of PA muni's with an after tax yield of 3.5% would equate to a taxable equivalent yield of between 5.5% and 6.1% (depending on your tax bracket). Not a bad return when two year treasuries yield 0.60% and the ten year yields 2.94%, before taxes!

While the Global Tactical Asset Allocation product is my main job, I recently created a laddered muni bond portfolio for a client at a nominal fee. If this is something that may be of interest to you please give me a call. "The floods is threatening, my very life today. Gimme, gimme shelter or I'm gonna fade away."

Lies Revisited-- My Readers Comments:

I had some very interesting comments from my readers regarding the White House's recently released YouTube video on the Dodd-Frank FinReg Bill (DRANK for short), I thought I would share a few (the ones that weren't profane):  In case you missed it, view with caution ... What Wall Street Reform Means for You brought to you by The Obama White House.

--Thanks Chris, I feel dumber for having watched it. The sheer arrogance of this White House amazes me!

--Is it me, or is it all of us Neanderthals that he insulted!    2:33 Add to queueAdded to queue All Geico Cavemen Commercial435,454 viewsri4162

--The White House is walking a very fine line. They have been treating us like we are totally incapable of taking care of ourselves, and now they step it up a notch to full retard...and as we all know "Full Retard" doesn't win you the Oscar, it just makes you look stupid. View Clip Full Retard Scene

And my favorite:

--You know, when flipping houses was like totally cool, I don't remember lots of forms.  They just handed me a mirror and said, "blow on it."  I didn't see any blow on it, so I laughed and got it all fogged up.  I said sorry, cuz now the mirror was damp and liners get gunky on damp mirrors, but they thanked me and gave me a set of keys.  Is it gonna be easier than that now that the government cares about me?

Computational Knowledge Engine:

If knowledge is power...consider yourself more powerful!

This is one of the most amazing knowledge sites I've ever seen, please share!

http://www.wolframalpha.com/screencast/wolframalphaintro.html

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Lies: Part II

Sometimes I can't even believe it when I see it with my own eyes!

The White House just put this video out on You Tube to make sure you understand that everything bad that happened in the last decade was caused by greedy bankers/casino operators, and had nothing to do with stupid consumers or politicians. And that the new FinReg Bill will make sure that this will never happen again. Banks will be smaller (tell that to JP Morgan, Bank of America, or Wells Fargo), and we will never have to bail them out again. Again, no mention of the $3.7 trillion or the ongoing billions flowing into Fannie and Freddie. Lets not complicate the story with facts. 

Sadly your tax dollars paid for the video.

What Wall Street Reform Means for You

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Lies

Lies, dripping off your mouth like dirt
Lies, lies in every step you walk
Lies, whispered sweetly in my ear
Lies, how do I get out of here?
Why, why you have to be so cruel?
Lies, lies, lies I ain't such a fool! 

Lies-Rolling Stones

Lies, whispered sweetly in my ear. Today I happened to catch our President signing the 2300 page nightmare of a bill called the "Dodd-Frank Wall Street Reform and Consumer Protection Act". And as he is wont to do, states emphatically that, "This reform will help foster innovation, not hamper it." And my favorite, "Finally, because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period." 

Wow, so if I understand my President correctly (after all he did say, "Period") the government's (i.e., yours and mine) support of bankrupt Freddie and Fannie ends today!

Well, not so fast. Why, why do you have to be so cruel? Later in the day I caught a great interview with Neil M. Barofsky, the Special Inspector General for the Troubled Asset Relief Program ("SIGTARP"). SIGTARP and Mr. Barofsky's job is to conduct and supervise audits of the TARP programs to protect the interests of the American taxpayers. A very noble job indeed. In his interview on the Dylan Ratigan Show he states, "When I ask people if the amount of Federal support for the nation's financial system has increased or decreased over the last year, their unanimous answer is, decreased." Unfortunately nothing can be further from the truth, taxpayer support has grown by 23% over the last year from $3.0 trillion to $3.7 trillion! Mr. Barofsky is screaming the truth, but is anyone in Washington listening? The simple fact, that the President refuses to acknowledge, is that the new Fin-Reg bill does nothing to stop this robbery. Lies and taxpayer funded bailouts continue. 

Here is the link to his interview:

White House continues bailout bonanza
http://www.msnbc.msn.com/id/32450072/vp/38349626#38349626

And here is an excerpt from his just released report. The full report can be found here:

Executive Summary

"An examination of the broader context demonstrates that the overall Governmental efforts to stabilize the economy have not diminished. Indeed, the current outstanding balance of overall Federal support for the nation’s financial system, in actual expenditures and guarantees, including ongoing initiatives run by the Federal Reserve System (“Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), the Department of Treasury (“Treasury”), the U.S. Department of Housing and Urban Development (“HUD”), and other Federal agencies, has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program, largely without additional Congressional action — even as the banking crisis has, by most measures, abated from its most acute phases. This increase has focused primarily on additional Government support of the still-distressed housing market and the financial institutions whose fate has been so closely tied to it throughout this crisis, with additional support of asset prices and low interest rates (predominantly via the Government’s expanded role in the mortgage market) through increases in HUD programs and support of Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”)  more than offsetting the decline in amounts outstanding under TARP and in the winding down of several Federal Reserve liquidity programs." 

On a much more uplifting note, a website devoted to the truth:

Computational Knowledge Engine:

If knowledge is power...consider yourself more powerful!

This is one of the most amazing knowledge sites I've ever seen, please share!

http://www.wolframalpha.com/screencast/wolframalphaintro.html

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Don't Stop Believin'

"Working hard to get my fill,

everybody wants a thrill

Payin' anything to roll the dice,

just one more time

Some will win, some will lose

Some were born to sing the blues

Oh, the movie never ends

It goes on and on and on and on

Don't stop believin'

Hold on to the feelin'

Streetlight people"

Don't Stop Believin' by Journey

As performed by Cast of Glee, congrats on the 19 Emmy nominations. Glee is a great show to watch with the kids, they now actually think some of Dad's music is "kinda like OK."

Glee Cast - Don't Stop Believin' + Lyrics

Dark Cross:

There has been a lot of talk lately about a so called "Dark Cross". A "dark cross" is a technical indicator that refers to the markets 50 day and 200 day moving averages. Without getting into a tremendous amount of detail the "dark cross" is triggered when the 50 day moving average crosses below the 200 day moving average, this is considered bearish. The opposite of a "dark cross" is a "golden cross," when the 50 day moving average crosses over the 200 day. The reason the media is talking about this technical indicator is that the S&P 500 has recently breached the dark cross. The last time that this happened was in February 2008 which turned out to be a great time to get out of stocks. This indicator is not always so prescient. Since 1929, the "dark cross" has appeared 45 times, over the next 12 months the market was actually up 28 times, and down only 17 times. The market was down 12 months later only 37% of the time! So why do people pay attention to an indicator that is only right 37% of the time? The reason people pay attention to this indicator is that it protects you during huge bear markets like 1929, 1937, 2000, and 2007-08 to name a few. While you might experience some missed opportunities if the market turns and rallies again (which has happened this week), at least you don't lose massive amounts of principal. While "everybody wants a thrill," most that I know would rather it not be to the downside.

Investment Considerations:

The indicators we follow for the US Equity market are still neutral, they have not crossed over to bearish territory, yet.

We did have a couple of other assets trigger trades this week. US REIT's moved from Bullish to Neutral causing us to sell, while Emerging Market Bonds moved from Neutral to Bullish causing us to buy. 

The Fed vs The US Taxpayer/Saver: 

On June 23 the Federal Reserve announced that they will yet again leave rates unchanged at the target rate of 0.00% to 0.25%. This marks the 15th consecutive meeting that rates have remained unchanged since December 16, 2008. The Fed's exact words, "The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period." 

Translation: The Federal Reserve continues to believe that the best way to help the country is to help our banks earn easy money by borrowing at 0.00% and buying Treasuries at 2 - 3%. This also continues to allow our politicians to borrow with impunity since interest costs are a minor concern.

There are no free lunches though, while bankers and politicians prosper, someone has to pick up the tab. That someone is the taxpayer, saver, and investor. To some (present party included), it appears that the Fed has decided to reward the reckless at the expense of the prudent. According to the federal Bureau of Economic Analysis, the percentage of personal income accounted for by interest and dividends was 17.2% in 2000, but only 14.5% today. In the meantime, transfer payments like Social Security and Welfare rose to 18.2% from 12.8%.

 

This ZIRP (Zero Interest Rate Policy) is forcing some investors to take on significantly more risk than what would normally be deemed prudent. Underfunded pension plans are significantly increasing their levels of risk to try and meet actuarial assumptions that average near 8%. We are seeing these plans greatly increase their allocations towards alternative assets like hedge funds and private equity. While these assets may increase longer term returns, it is at a cost of less transparency, less liquidity, higher fees, and more uncertainty. Chasing returns rarely ends well.

The other primary victim of ZIRP is the saver/investor, especially the retired. These people are either saving for retirement or trying to live off of their investments during retirement, and again they are faced with meager return prospects. As a professional money manager it pains me when I see people stretching for returns that just can't prudently be attained. They fall prey to countless charlatans promising returns that just aren't there.

The Fed is almost entirely populated by Keynesians. Keynesians are economists that believe that the Government can spend it's way to prosperity. These Keynesians have been scratching their heads of late wondering why consumers aren't out there borrowing more and spending more, especially with their very generous ZIRP. The reason, which escapes them, is that not all investors and savers are stupid. They are not willing to significantly increase their levels of risk for the "potential" of higher returns. Faced with minimal returns on their investments, and significantly increasing taxes, they are choosing to save more. With less after-tax income coming in they are hunkering down and squirreling away as much as they can. ZIRP leads to ZIGP (Zero Income Growth Policy). 

These taxpayers/savers/investors are also working harder and harder to elect a new crop of politicians that understand their plight. "Don't stop believin', hold onto that feelin'." 

Unfortunately we can't elect our Fed governors so it will be some time before the Keynesians are replaced by Austrians (those that believe in living within your means). In the meantime; continue to hunker down, pay off your debt, save more, and please, please don't chase after returns. 

Harrisburg Closer To Chapter 9 Bankruptcy Filing:

It appears likely that the first major municipal bankruptcy of the New Normal is quickly approaching, with none other than our own Harrisburg ready to close the gates. In an interview with restructuring site Debtwire, the City's controller Dan Miller said Harrisburg would be better off filing for Chapter 9 bankruptcy instead of trying to restructure under Act 47, the Financially Distressed Municipalities Act. He added that Act 47 never solved the problems of any municipality that entered the program (Just look at Pittsburgh which has been operating under ACT 47 since 2003, and has yet to address the problems of pension funding or health care costs). Of course Governor Rendell hopes the city "will sell assets or seek Act 47 before making a Chapter 9 filling." It never looks good to have your state capital declare bankruptcy while you are governor! "Some will win, some will lose."

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Second Quarter Performance

The second quarter of 2010 saw "Risk Off" overtake "Risk On". Risk came off as investors fears increased regarding the significant fiscal deficit problems facing most developed countries, the oppressive government "boot on the neck" of corporate America, and the environmental disaster in the Gulf of Mexico. As the table below shows; this manifested itself in a rather steep selloff in equities and commodities, and a continued flight to safety (namely Gold and US Treasuries). Continued high unemployment, increasing taxes, and some signs of Government austerity (outside of the US), has increased the odds of a double dip recession (or at the least a minimal growth recovery).

Gold is up 13.37% through June while International Equities (EAFE) were down -14.31%, a whopping divergence of nearly 28% in only six months! But I think the biggest shocker of 2010 is the 11.62% return on 10 - 20 year US Treasuries. The ten year treasury yields less than 3% and the two year is about 0.60%. Investors are so fearful that they are willing to accept minuscule returns on their investments for the safety of repayment. But just because ten year treasuries yield 2.95% doesn't mean you can't still make money in them. It all depends on where interest rates are in the future. If rates fall to 1.95% over the next year your return would be 10.75%, but if they went up to 3.95% your return would be -4.50%. These are not forecasts, just an example of what is possible. 

 

Our goal at Rockhaven is to preserve and increase purchasing power over time. We do not try and forecast the unknowable future. Instead we try and stay "In Harmony with the Markets." So far this year that has meant taking a more defensive position. As can be seen from our returns we've been rather successful for a diversified investment manager. Our client composite performance (net of fees) was -3.42%, and our volatility (as measured by standard deviation) was only 2.32% (the lower the number the better). 

As we head into the third quarter we have about 31.5% in cash equivalents, and that number appears likely to increase as our equity market indicators continue their bearish trends. Of course the future is always changing and our plan is to change right along with it ... to be "In Harmony with the Markets."

Performance Comparison 2010
Benchmarks Ranked Year-to-Date	Ticker	Jan	Feb	March	April	May	June	Year-to-Date June 2010	Standard Deviation Monthly Returns
Gold ETF	GLD	-1.26%	3.27%	-0.44%	5.88%	3.05%	2.35%	13.37%	2.62%
Treasury Bonds 10-20 yr	TLH	2.82%	0.11%	-1.13%	2.29%	3.25%	3.85%	11.62%	1.95%
Real Estate REIT US	VNQ	-5.52%	5.58%	10.20%	7.15%	-5.33%	-5.16%	5.75%	7.26%
Rockhaven GTAA Client Composite (net of fees & expenses)		-3.42%	2.02%	3.28%	1.09%	-5.42%	-0.72%	-3.40%	2.32%
Rockhaven GTAA Model		-3.56%	2.13%	3.19%	1.51%	-5.40%	-1.05%	-3.43%	2.32%
International Treasuries	IGOV	-1.03%	-0.02%	-1.22%	-1.36%	-3.29%	0.78%	-6.03%	1.38%
S&P 500 Index SPDRS	SPY	-3.63%	3.12%	6.00%	1.55%	-7.95%	-5.41%	-6.86%	5.42%
Commodities CRB Index	CRY	-6.27%	3.46%	-0.52%	1.60%	-8.25%	1.46%	-8.76%	4.74%
Real Estate REIT Int’l.	IFGL	-6.05%	2.43%	4.55%	-1.24%	-9.70%	-0.28%	-10.53%	5.32%
International Stocks EAFE	EFA	-5.07%	0.27%	6.39%	-2.80%	-11.19%	-1.98%	-14.31%	5.82%

Is Stock Picking Dead?

Another amazing thing happened in June. Something that didn't happen in October 1987, during the internet bubble in the late '90's, after 9/11, or during the Fall of 2008. Yes, in June 2010 stocks were at their second highest correlation since 1950, and May and June were the two highest back-to-back months of correlation ever (this means that more and more stocks are moving in tandem up & down)! The reason this matters to all stock pickers, both fundamental and quantitative, is because if all stocks are moving in tandem stock picking doesn't matter. The markets today are dominated by algorithmic trading (70% - 80% of daily volume), and these traders tend to move in a herd, buying and selling baskets of stocks. This is a very different market than anything we've ever experienced, I'm not saying its good or bad, just different. This is one of the big reasons that I believe Global Tactical Asset Allocation is much more important than stock picking. GTAA is the cheapest, most efficient method of keeping a portfolio in synch with the markets, while allowing us to move quickly into or out of positions.

Special thanks to Barclays Quantitative team for bringing this to my attention.

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.