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Risk Management
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Managing The Yield Curve In The 1940s

For those of you who are trying to get your mind around YCC and the history of the FEDs actions, this paper is exceptional: 

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr913.pdf

 

Very interesting chart in the paper: 

S&P during that period: 

S&P Valuation: 

Industrial Production: 

After spending time talking with John Fadool, I have been trying to think through financial history. 

Here is the link to the video if you didn't catch it: https://youtu.be/5zPYfC0Q0tM

I am just spending time thinking through each decade and comparing every chart I can find. No conclusions yet, just observations. 

 

Crypto Report

Hey guys, 

I just wrote a crypto report breaking the recent correction and the things I see developing in the space. If you are new to crypto then it will be a helpful breakdown of the space. If you are much more acquainted with the space then it will be a helpful synthesis of major data points.

I don't have all the answers so if you want to provide feedback or where you think I am wrong then please do! If I am wrong then I'll just change my mind, sounds pretty simple to me. 

Bottom line: I am increasing exposure little by little at the bottom end of the range in crypto. We have no clue where or when the price will move. So don't throw risk management out the window. 

** This is not financial advice. 

Cardano and iohk seem to be stealing Ethereum users! *gasp*

Latest news I've seen is the ERC20 converter to move tokens directly off ETH and on to ADA/Yoroi.  Incase anyone was interested! =)

The Equity "It Factor" (Breaking down Sam Burns' Risk Models on Volatility, Credit Spreads, Momentum, and Risk Appetite)

Hey all, @Nick Correa are back at it again, this time breaking down how Sam Burns uses his equity risk model to determine an ideal stock/bond allocation (the riskier the market is, the more bonds and fewer stocks you would want to own).

We get into key topics such as volatility and momentum, and we also take a look at Burns' own model, the Monitor of Analysts' Earnings Revisions (MAER), and what it indicates about which sectors (financials, energy, industrials, etc.) are the most attractive at this time.

Please enjoy! And comment if you have any questions or want clarification about Sam's process. Charts below

Link to the original interview:

https://www.realvision.com/shows/the-expert-view/videos/asset-allocation-in-a-risk-on-environment-bank-and-industrial-stocks

Global Equity Risk Model:

Components of the equity risk model:

Dividing the MSCI "All Country World Index" (stocks) by 10 year Treasury index (bonds) can indicate investors' appetite for risk (https://www.msci.com/acwi):

When high volatility stocks are doing well, that too is a sign that investors are putting their foot on the gas pedal:

Same when high beta stocks are outperforming the low volatility equities:

Interestingly, financials and energy now comprise a large part of the high beta index:

Here is Sam Burns' MAER rankings about which sectors have the best analyst earnings revisions (top to bottom):

Analyst are tripping over each other to update their earnings estimates for financials:

Thanks so much @Farrell Murphy and @Weston Nakamura - and, of course, the one and only @Nick Correa !
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