• Core Inflation Takes A Breather

    Posted on September 13, 2018 by Gemmer Asset

    Printable VersionThis morning the Bureau of Labor Statistics (BLS) released CPI inflation data. It showed that Core Inflation (ex-food and energy) grew +2.2% year-over-year. This is down from the +2.4% economists expected and is the first time since 2017 that a Core CPI data point was lower than the previous month.     At risk of getting too deep into the weeds, I’ll only mention that today’s number appears to be the result of one…
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  • Today’s Jobs Report – Wage Growth Picks Up

    Posted on September 7, 2018 by Gemmer Asset

    Printable VersionToday’s jobs report was a solid one with nonfarm payrolls rising by 201k, higher than both the 190k surveyed by economists and the 157K of the previous month. The unemployment rate stayed put at 3.8%, but average hourly earnings (a measure of wage growth) came in at 2.9% growth year-over-year, a new cycle high as you can see below.     This report, and the positive headlines associated with it were overshadowed by the…
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  • Market Recap

    Posted on August 31, 2018 by Gemmer Asset

    Printable Version   First Turkey, Now Argentina   The emerging markets (EM) haven’t been in the news for what, a couple weeks? Dire headlines about Turkey’s problems were all the rage for a while. This week the spotlight, or more accurately the bulls-eye, shifted to Argentina.   By way of background, Argentina has a colorful history when it comes to debt repayments. Specifically, they have a history of not paying. Since independence Argentina has managed…
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  • The Problem with Leveraged ETFs

    Posted on August 30, 2018 by Gemmer Asset

    Printable Version“When you combine ignorance and leverage, you get some pretty interesting results.”   -Warren Buffett   With the proliferation of ETFs over the past 20 years just about every asset class you can think of has at least a handful of ETFs to choose from. Because of this, providers have had to get creative in bringing “unique” products to market. Some of the more interesting (trying to be kind here) recent offerings have included…
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  • Should We Care About the Longest Bull Market?

    Posted on August 27, 2018 by Gemmer Asset

    Printable VersionIf you follow the financial press it is hard not to notice all the noise around the duration of this bull market. The current rally is now officially the longest bull market in post-war history. We are finding it is hard to get too worked up about this.   First, the news. Last Wednesday the S&P set the record for the longest number of days without a 20% correction. A 20% decline is arbitrarily…
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  • Behavioral Biases

    Posted on August 22, 2018 by Gemmer Asset

    Printable Version    “Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.”   ― Daniel Kahneman, “Thinking, Fast and Slow”   Behavioral finance is a relatively new field. Part psychology, part finance, its practitioners have attempted to identify biases that individual investors have so they can be mindful of their effects when making investment decisions.   What I thought I’d do in this…
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  • Market Recap

    Posted on August 17, 2018 by Gemmer Asset

    Printable Version   August has a habit of throwing up surprises for investors. Those of a certain age might remember Augusts of 1998 (Russian default), 2007 (first redemption freeze of sub-prime crisis), 2011 (U.S. sovereign downgrade) and 2015 (renminbi devaluation/S&P 500 flash crash). The chart below shows the drawdowns in equities, EM assets, and hedge funds in each August going back to 1997.     This August is giving us another emerging market scare. The…
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  • ‘90’s Flashback

    Posted on August 15, 2018 by Gemmer Asset

    Printable Version   Ahhh, that takes me back to simpler times. Pets.com, flip phones, Netscape web browsers. Now while Prince’s song was referring to the world ending at the turn of the millennium, for emerging market investors the world actually came close to ending in 1997 and 1998. Both Thailand and Russia ran into some financial difficulties and Long-Term Capital Management managed to implode in an entertaining fashion. The Fed cut rates as a result…
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  • Do Liquid Alternatives Help A Portfolio’s Risk Adjusted Return?

    Posted on August 14, 2018 by Gemmer Asset

    Printable VersionI won’t beat around the bush, the answer to this question is, like many things, nuanced. It really depends on the alternative fund/vehicle you use. Obviously with hindsight we can pick the best fund, but its another story when you’re trying to make a judgement about whether or not an alternative fund will be additive to your portfolio ex-ante.   Morningstar came out with an interesting paper on this topic. In it, Jason Kephart…
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  • Market Recap

    Posted on August 3, 2018 by Gemmer Asset

    Printable Version   A mixed week for equities. U.S. stocks were generally higher with the S&P picking up +0.8% and small-caps +0.6%. The NASDAQ managed a +1.0% gain as Apple’s market cap surpassed $1 trillion as you can see below – read more here, the first U.S. company to achieve this feat.     It is hard to believe that Steve Jobs died in 2011 when Apple had a market cap of ‘just’ $300bn.  …
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