I pity the passive investor in this market. Stuck with a single focus on "buying the market", they have never been given the chance to make anything but a single bet. As shown below, stocks have rarely, if ever, been this uncorrelated with each other. Just when stock correlations have plummeted, they are missing out on an investing lifetime opportunity by owning an index dominated by a group of tech stocks that are suddenly underperforming. Stock picking as a strategy has ret

There are cracks appearing in the U.S. economy. When you turn on the CNBC or Bloomberg financial channels, you get the same story on oil prices. They continue to use the oil futures markets to describe the costs to consumers of energy. But you don't put crude oil into your car - it's gasoline and diesel that run your car. And I'm sorry, EV fans - less than 2% of miles driven in the U.S. are fuelled by electrons. Trump's on-again, off-again war in the Middle East is causing m

Phew, that was close. Fed officials are seldom as blunt as Christopher Waller was when yesterday he was quoted as saying that rates would have to rise in inflation came in hotter that expected in today's CPI report. Thankfully, it didn't. But you cans see the level of angst in capital markets in the internal correction that was playing out recently. The US2Yr bond yield touched 18 month highs yesterday on the report of Fed hawkish commentary from Chris Waller and stocks gyrat

Back in January, which seems like a lifetime ago now, I made some 'stick your neck out' predictions for the year ahead. Some were better than others, and some were a bit of a layup. Auston Mathews - I'm looking at you. This exercise shows the folly of predicting the future. The random walk aspect of financial markets remains undefeated as a model for risk assets. But despite that, we try anyway. Let's look at the results on my half-year report card: Samsung is a better phone/

Now that the 'Sound of Trumpets' sell-off has gained steam, investors can go back to doing what they should have been doing all along - buying good stocks at reasonable prices. The mania over AI, like all fevers, has finally broken. In a classic case of "emperor has no clothes," the SpaceX bond prospectus has completely spooked stockholders into selling. I can just imagine what its "Material Risk" section contains. It must read like a science fiction novel - or maybe a Shakes

Now that the SpaceX IPO has cleared the launch pad and is headed towards Mars, the market can go back to chasing its tail. Or should I say tale - like the one that brokers are telling clients. Can they continue to entice clients to pile into the AI momentum trade? Or should they diversify their risk in a market that continues to focus on a single theme? The FOMO induced rally is running on fumes as the surge in supply - IPOs and debt issuance - is matching the incremental dem

After a two-month rally in AI, some of the plates are starting to wobble. Unsurprisingly, the Artificial Intelligence fever broke on Friday. With a sudden, sharp sell-off of 3-4% across many favourites, investors received a face slap after an unfettered run-up. Semiconductors and Hyperscalers sank amid concerns about a glut in capital raising by leading AI Megatechs. Much to the chagrin of underwriting brokers, the rush to market of AI-related private companies, OpenAI, Anth

How much can the stock market inflate the AI beach ball? Yes, that image was generated by an AI agent provided by Google, the company with the highest free cash flow in the S&P 500. Despite that, they announced their intention to raise an additional $80B in capital to fund next year's AI infrastructure spending. With the arms race for AI dominance a feature, not a bug, for the economy as a whole. But just as any bug will, this feature will eventually bite. U.S. capital spen

Kevin Warsh, the newly installed Federal Reserve Chairman, has inherited a problem not of his making. The Orange Menace's war with Iran was meant to deflect from more mundane issues, such as those contained in a certain set of DOJ files. Unfortunately for Mr. Trump, resulting higher oil prices quickly fed into inflation expectations, threatening the global economy and distorting the fixed-income markets. Only one week into his new role, and he's dropped his new Fed boss direc

Come on in, the water's fine. But can anybody tell when it's time to get out? It has been said that valuation is a lousy timing tool in the stock market. But now that the global bond bears are in the ascendancy, I'm paying more attention to valuation. It's not like anybody has been arguing that stocks are cheap over the last couple of years; they haven't been cheap since the 'Covid-19' bottom in 2020! The chart below is evidence of that. Admittedly, the rally since the 'Liber