I would like to start today with a provocative quote that I came across this morning. It speaks to my suggestion that once all the US political nonsense is in the rear view mirror and Europe changes lanes on recession, the road ahead for the market is clear for high-speed travel.
- One of the big investment shifts of our day may be at hand – regardless of how global markets actually perform this year.
The quote above comes from a detailed article, but the thesis is compelling and worth serious consideration, and it is worth reading if you have an interest in making your money work in 2013 and beyond. Here is the link.
http://finance.yahoo.com/news/great-rotation-flight-equities-2013-063451893.html
Here is the thesis.
- What’s already known as the “The Great Rotation” – a tilting of pension and insurance funds’ strategic, long-term asset preference back toward equity from extreme positioning in bonds – has been one of themes of the new year so far. The gist of the argument is that investor holdings of now expensive, ultra-low yielding government debt – following a virtually unbroken 20-year bull market in bonds – are ripe for rebalancing. The attraction of relative and absolute valuations in equity will coax the outflow to stocks.
As I have said, the road is clearing for a sustained market rally that could take the market past historic highs in 2013. Again, the politicians in Washington and the European recession are still in the way of a surging US and global economy, but those impediments could soon be gone, as Washington stumbles toward an inevitable conclusion – passing legislation that addresses our fiscal problems – and Europe begins to heal economically. The market sees the juncture and it is beginning to recognize the reality, the same reality I see.
- It’s this juncture that has some of the most persistent global equity bears of the past two decades, such as Societe Generale strategist Albert Edwards, rethinking the big picture. While there’s little thaw evident in his view of an investment ‘Ice Age’ over the next couple of years, Edwards now reckons that over 10 years long-term institutional funds are in danger of missing “the cheapest equity prices in a generation.” From such a committed bear, that’s really saying something.
The market is about money flow. Liquidity is the basis of all major moves, bull or bear. If the sentiment is positive, the flow is bullish. If the opposite is true, the flow is bearish. Simple stuff.
- With the whiff of global economic recovery in the air as major central banks floor cash rates, buy bonds and neutralize systemic stability fears, mutual fund and retail investment flows are already on the move in 2013.
- German ZEW investor sentiment rose to its highest level in more than 2-1/2 years in January while Spain has raised around 14 percent of its 2013 funding target.
When the road clears up, the market has a clear run, at least until it comes across the next impediment. Once past the ones now in the way, it might be some time before we see another. In the meantime, look closely at the passing scenery. There just might be something valuable in the roadside brush.
- Within the realm of connected devices, set-top boxes (STBs) (including digital cable, satellite, IP/DSL and digital terrestrial) led the way in 2011. However, by 2014 digital televisions (DTVs) will supplant STBs as the predominant connected device, representing a 37.0% share of the total connected device market in that year.
Trade in the day; Invest in your life …
