The Bull Market Turns Nine!

The weekly Market Update is posted at Alpha Baskets and includes the following; We now know a little more about the steel and aluminum tariffs. While actual trade wars can’t be good for anyone, the detail we have now implies that this all may be a negotiating ploy. Canada and Mexico have a very visible path to being exempt and other countries can negotiate out of them. Last week we said that Trump supporters would say this is the Art of the Deal at work. That hope is alive and well. And from my page at TheMaven; The investment merits of putting your head in the sand. The real meaning of success. 28827225_2104454243169351_3784339495679599994_o 28698980_2104411413173634_4103142112565104457_o 28616801_2102636863351089_425405379067661394_o

Are Alternatives Substitute For Equities?

My latest post for Alpha Baskets is posted and includes the following; The idea of reducing stress by placing yourself in fewer stress-inducing situations resonates with me personally and professionally. Personally, in that I have been working from home since my mid-thirties so no traffic and far fewer frustrating encounters with people at the office and professionally in that I have long advocated using diversifiers (now called alternatives) to manage portfolio volatility. We know that volatility causes people to reach a breaking point where they do self-destructive things, portfolio-wise. Managing volatility provides the opportunity to put clients in fewer situations where they might reach their breaking point. And from my page at TheMaven; The importance of proper position sizing. An update on the active/passive debate. Chiricahua National Monument 28516068_2103215849959857_3303917689354313531_o The ghost town of Lowell which is near Bisbee, AZ. 28616774_2102636496684459_2290210312084020590_o

Trade Wars! Give Me Those Trade Wars!

This week’s Market Update is posted at Alpha Baskets and includes the following; It was widely reported that technology grew to take up 25% of S&P 500. Sector weightings in the index can give great clues for signs of excess in markets as was the case with energy growing to more than 30% of the S&P 500 in the early 1980’s, tech getting to 30% 18 years ago and financials at 22% at the peak in 2007. Where tech is often the largest sector in the index, 25% is less troublesome than if some other, usually smaller sector had become that large. For our money, 30% is unsustainable and tech at 25% is merely troublesome and an overweight now, to tech might not be prudent. Please click through to read the entire update. Here’s a link to my post at TheMaven about more poor decisions coming to light at the
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VCs Are Screwing Up Price of Australian Wool…

Against a backdrop of unprecedented global capital flows, three themes emerged in 2017 that underscored a fairly dramatic evolution of the venture capital model: (i) continued globalization of the venture industry, (ii) further concentration of capital with fewer firms, fewer portfolio companies and (iii) advent of novel cryptocurrencies. And I am pretty sure that all of this drove up the price of Australian wool by nearly 60% over the past two years. This past year was a watershed for the US venture industry as it represented less than half of global venture capital activity for the first time ever. Notwithstanding that, it was another robust year with over $84.2 billion invested in 8,076 companies according to National Venture Capital Association (NVCA) data. While the number of companies was the lowest annual level in five years, the dollars invested was the highest amount in nearly 20 years. Quite clearly, investors are supporting
2017 VC
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2017 Exit
dry powder
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Continue reading "VCs Are Screwing Up Price of Australian Wool…"

VCs Are Screwing Up Price of Australian Wool…

Against a backdrop of unprecedented global capital flows, three themes emerged in 2017 that underscored a fairly dramatic evolution of the venture capital model: (i) continued globalization of the venture industry, (ii) further concentration of capital with fewer firms, fewer portfolio companies and (iii) advent of novel cryptocurrencies. And I am pretty sure that all of this drove up the price of Australian wool by nearly 60% over the past two years. This past year was a watershed for the US venture industry as it represented less than half of global venture capital activity for the first time ever. Notwithstanding that, it was another robust year with over $84.2 billion invested in 8,076 companies according to National Venture Capital Association (NVCA) data. While the number of companies was the lowest annual level in five years, the dollars invested was the highest amount in nearly 20 years. Quite clearly, investors are supporting
2017 VC
2017 Exit
2017 Exit
dry powder
Rev run rate
wool
Continue reading "VCs Are Screwing Up Price of Australian Wool…"

Game Planning Another Lost Decade

My latest post at Alpha Baskets is posted and includes the following; Meb Faber Tweeted out portfolio return expectations from various market participants looking out over the next ten years. Vanguard was at the low end looking for 4.5%, the “average investor” was in the middle at 10.2% and hedge funds think they will generate 13.0%. Depending on who you read you can find expectations in the three’s as well. Please click through to read the entire post. 28235266_2096074064007369_2328869146812576166_o 28164596_2096074124007363_7601710757524655202_o

Tinder for Healthcare

This is likely not about what you think… It has been just over a month since returning from the JP Morgan Healthcare conference and my shoes are still wet. San Francisco is an amazing city, but less so in torrential rain when you must scramble from hotel to hotel, eagerly looking for your next 30-minute meeting with someone you may never see again. Trying to return emails or look up the location of your next get-together while holding an umbrella, racing between traffic, is challenging at best. Swipe right…or was it left. Yet we all go – and actually look forward to going, in large measure to gauge the pulse of the industry and to assess what are some of the most critical themes for the upcoming year. This year, in particular, JP Morgan was a “can’t miss” event given the recent extraordinary healthcare M&A activity and the high-water mark pace
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This Week’s ETF Maven & Random Roger Posts

The weekly market update is posted at Alpha Baskets and looks at the huge treasury auction and the poor returns from Greenlight Capital. Last week at Alpha Baskets I took a look at dilemma of depriving yourself today for a retirement with many unknowns. And from over at TheMaven; A look at whether Dennis Gartman really blew up betting on a blockchain stock. Hedging your portfolio incorrectly can make it much worse. The latest from the Walker Fire Department and how volunteering will enhance your health and your retirement. 12963560_1719352995012813_3637194686437148728_n  

It Was A Bad Week For Volatility

My latest post for Alpha Baskets takes a look at the recent crash….and snapback. The dip/correction/crash of the last couple of weeks has provided a useful litmus test for certain alternative strategies, it has reminded us how risky some of the more complicated strategies can be and reminded us that equities are not a one-way trade; after nine years of going up, maybe after peaking at 2872 the path to 3000 on the S&P 500 or even 4000 includes a trip down to 2000 first. And please remember to check out my page at TheMaven. 27654500_2086320184982757_3373117337791190789_n 27798149_2086320094982766_1166892044244310827_o  

Volatility Is Back in Town and It’s Angry

The weekly Market Update is posted at Alpha Baskets is posted an includes the following; The CBOE Volatility Index took center stage last week with very dramatic action Monday and Tuesday. Monday, the VIX jumped over 100%, bringing an end to the one way nature of the short volatility trade. VIX had been going down for so long that a couple of the exchanged traded products became very popular for their massive gains. You may have heard the story of a Target employee to turned his life savings into a $13 million fortune by shorting the VIX via one of the ETPs. On Monday the VelocityShares Daily Inverse VIX Short Term ETN, one of the two big ETPs had an event acceleration, effectively terminating the product. Per the prospectus, a single day rise in VIX of 80% would allow the issuer to cancel the product, which they are choosing
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Ontario Healthcare Tech Scene, Hey

Two decades ago I would occasionally find myself in Ontario given the developing innovation corridor between Toronto and Waterloo, affectionately referred to as “Silicon Valley North.” Last week I visited again and saw the emergence of a strong healthcare tech ecosystem, leveraging historic strengths in telecom infrastructure and the recent (and significant) commitments to the artificial intelligence sector. Out of a coordinated series of university initiatives, Thomson Reuters recently reported that over $350 million had been invested in the AI sector over the past three years in Ontario, employing over 1,100 AI researchers alone. “Silicon Valley North” is the third most important AI cluster in the world according to Element AI. This past week, Salesforce said it would invest $2 billion in the Canadian tech sector. My meetings were on the Canadian side of the Niagara Falls, which I had not visited since I could barely peer over
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The Ides of…February?

The weekly Market Update is posted at Alpha Baskets and includes the following; We would take a moment to remind investors that as of Friday, the S&P 500 has traded back to where it was in mid-January and is still up on the year. As noted, it is up more than 3% in 2018. At Friday’s close it was 3.9% from its all time high. At that level it is down a little and although it has been a while since it went down at all it is worth remembering that down a little goes with the territory of engaging in markets. All advisors have some sort of strategy they implement for their clients. That strategy is less important when the market is going higher causing no emotional concern, days like Friday is when that strategy becomes crucial for clients’ long term financial success. It is unlikely that too
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Software startups: Beware ‘magic’ bullets

I just read ‘Need More Time’? Guideposts For Tech Founders Going To Market When No Market Exists which is full of great tips for what they call ‘pre-chasm’ enterprise startups. The term ‘pre-chasm’ is a nod to Geoffrey Moore’s 1998 classic Crossing the Chasm and refers to companies that may have sold to early adopters, but haven’t yet found a way to sell to the mainstream. Getting sales going in those early years is terrifically challenging and requires great product and great sales. There are lots of common pitfalls that founders fall into and the whole post is well worth a read, but I want to highlight two sections which cover mistakes that in my experience many founders are prone to making.
  1. Over-value conversations and even deals with large enterprise customers. Here’s how they put it:Surely people paying you money for expertise is a strong signal you’re heading towards
    Continue reading "Software startups: Beware ‘magic’ bullets"

Four Weeks Of Gains To Start 2018? Don’t Mind If We Do

The weekly Market Update is posted at Alpha Baskets and includes the following; Furthering the discussion on equities, @tihobrkan tweeted a table from BofAML and EPFR Global showing $33 billion flowing into US equities last week, not fund flows but equities more broadly and this, he notes is close to a record. @awealthofcs tweeted that so far in 2018 the S&P 500 has made 13 new highs which equals the number of new highs made in the entire decade of the 2000’s. It is crucial for advisors to have a detached view on the comfort with which clients might have toward equities and educate them as to how unusual this type of environment is. The good times may or may not last for a long time still but this needs to be recognized for the unusual period that it is. Please click through to read the entire update.  After
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Monday links: when prudence doesn’t pay

As easy as… AI

Google is pushing hard to make artificial intelligence as easy to access as cloud computing, building services that reduce both costs and the technical skill required from users. To my mind, there is a strong parallel with how Amazon Web Services made it easier and cheaper for companies to build web apps. Throughout 2017 they made steady advances, releasing Google Cloud Machine Learning Engine and grew Kaggle, their community of data scientists and ML researchers, to more than one million members. They now have more than 10,000 businesses using Google Cloud AI services, including companies BoxRolls Royce MarineKewpie and Ocado. And now they are introducing Cloud AutoML, which promises to:
Help businesses with limited ML expertise start building their own high-quality custom models by using advanced techniques like learning2learn and transfer learning
Google seems to be in the vanguard, but Amazon and Microsoft are
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