Time to Trade in the Investment Tricycle

By Wade Slome

May 06, 2013

Wade Slome

As the stock market continues to set new, all-time record highs and the Dow Jones Industrial index nears another historic milestone (15,000 level), investors remain cautiously skeptical of the rebound – like a nervous toddler choosing to ride a tricycle instead of a bicycle. Investors have been moving slowly, but stock prices have not – the Dow has risen +13% in 2013 alone. What's more, over the last four years the S&P 500 index (which represents large companies) has climbed +140%; the S&P 400 (mid-sized companies) +195%; and the S&P 600 (small-sized companies) +200%.

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Reduce Hospital Readmission Rates or Else!

By Michael Kirsch

May 06, 2013

Dr. Michael Kirsch

I attended a medical staff meeting recently. These are required meetings and attendance is taken, as was done when we were in kindergarten. While some folks are interested in these meetings' content, many are not and simply sign the attendance sheet and then slither out in a stealth fashion. Sly doctors grab their pagers and then leave hurriedly pretending that they were summoned to an urgent medical situation, when they are actually heading for Starbucks.

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Did This Week’s Critical Economic Reports Vindicate Market’s Resilience?

By Sy Harding

May 03, 2013

Sy Harding

For several months the U.S. stock market has been impressively shrugging off a staggering string of terrible economic reports that seemed to indicate the economic recovery is stumbling again, as it has in each of the last three summers.

Since in each of those last three years the stumbling economy was accompanied by double-digit corrections by the S&P 500 of up to 21%, the market's lack of concern this time has been puzzling analysts.

In my column last week I noted that although the market gets high marks for its resilience and ability to shrug off the negative economic reports, it had also made almost no further progress over the last six weeks. The Dow & S&P 500 had been trading in a narrow sideways range since mid-March, while the DJ Transportation Average and Russell 2000 had pulled back 4% or so from their levels of mid-March.

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A Case for Owning Commodities When No One Else Is

By Frank Holmes

May 03, 2013

Frank Holmes

Sometimes following where money is being invested is a solid course of action to gain alpha; other times, a better opportunity lies in going the opposite direction, i.e., thinking contrarian.

Take commodities, energy and materials, which may be the most unappreciated areas of the market these days. According to Bank of America Merrill Lynch's Global Fund Manager Survey of 250 participants who collectively manage $725 billion, energy, materials and commodities are extremely underowned.

As you can see below, the global asset class positioning during the first week of April compared to historical data shows that energy positions are close to 3 standard deviations below the long-term average. An allocation to materials is more than 2 standard deviations below its long-term average and commodity exposure is close to 2 standard deviations below its historical measure.

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