Jun

21

P d TThe bonds and stocks and yen are doing a beautiful pas de trois. First the bond vigilantes act and then the stock vigilantes. And then the Asian vigilantes.

There is a sweet spot in stock returns over a certain magnitude each year retrospectively with most of the total returns coming from the big, big gainers. A direct test of it would be the subsequent performance of stocks after they return 100% or more during the year versus a matched random stock at that time.

The scholarly market of Israel was down 5% last week premonitioning the US decline but is now up 2% today. It is discouraging to see the bonds hovering just 2 points above their lows for a year, with stocks at these low levels.

Of 200 or so separate world markets covered by Bloomberg, the US is in the bottom 10 or so in performance this year. What is the cause of this, and will the gravitational attraction do its thing.

The big speculators often have the same positions in the summer. Is it chance or prescience, or meetings at play or drinks and does this cause the exacerbated moves one hypothesizes occur with inordinate frequency during the summer.

The match between the big markets often can be illuminated by the moves between teams in a good baseball, basketball, or football contest.


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