ChristopherCarrollSmith

ChristopherCarrollSmith

NTSX is an ETF that holds 60% S&P 500, 40% leveraged bonds. This is a highly efficient portfolio composition known as "return stacking" (recently popularized on Twitter by Corey M. Hoffstein). You get the best of several worlds: the lower volatility of the 60-40 portfolio, and the higher returns offered by leverage. Since leverage is used on the relatively safer...

ChristopherCarrollSmith

For various reasons, the Chinese tech giant Alibaba has been in a downtrend since October 2020. The company has had many headwinds, most of them related to the regulatory environment in China. Most of those issues now seem to be resolving, and I think BABA will be one of the better performers in the coming year. The China Credit Impulse A major leading...

ChristopherCarrollSmith

Emerging markets have dramatically underperformed the S&P 500 since the launch of the first EM ETF in 1987. However, during that period, there have been stretches of outperformance. In fact, there appears to be a cycle. EM outperformed from 1987 to 1994, underperformed from 1994 to 2000, outperformed from 2000 to 2010, and underperformed from 2010 until the...

ChristopherCarrollSmith

Just tossing this one out there: Cathie Wood's ARKK Innovation ETF is within 1% of completing a round-trip to its pre-pandemic highs. It's also at the bottom of a fairly major parallel channel that it's been forming since February last year. In purely technical terms, it looks poised for a bounce. This is not a long-term hold, especially with Tesla as the top...

ChristopherCarrollSmith

Headline Potential Merck has three drugs currently under priority FDA review, one of them a Covid-19 drug: Molnupiravir, an antiviral for Covid-19 which has received a positive opinion from the advisory board and which Merck's CEO says should work against any variant Vaxneuvance, a pneumococcal vaccine Lynparza, a breast cancer drug Merck also...

ChristopherCarrollSmith

A Mean-Reversion Play Power generators like NRG and PNW have been quite beaten down lately, mostly because of surging oil and natural gas prices as we head into winter. NRG is .8 standard deviations below its mean, with 82% upside to its median price multiple of the last 3 years. PNW is currently trading about 3 standard deviations below where it usually trades...

ChristopherCarrollSmith

Markets Have Been Celebrating No Corporate Tax Hike Stocks have been marching higher as the risk of a near-term corporate tax hike evaporated due to hard bargaining by centrist Democrats Joe Manchin and Kristen Sinema. Prediction markets are now putting the odds of no corporate tax hike at about...

ChristopherCarrollSmith

This one is almost pure intuition. We're in pharmaceuticals earnings season now. Seagen reports after market today. A bunch of other large holdings of XBI report on November 3-4, and a bunch more on November 8. Bonds and tech stocks have made a breakout move upward, and small caps look primed. (XBI is full of small and micro caps.) XBI has had a long consolidation...

ChristopherCarrollSmith

The holy grail of diversification is to find several uncorrelated asset classes all with positive returns. One problem, though, is that diversified passive investing has caused all asset classes to become more and more correlated over time. Increasingly, you see stocks, bonds, commodities, and cryptocurrencies all move together. One approach to diversification...

ChristopherCarrollSmith

With today's weak inflation data, treasury yields are falling, which should be at least short-term bullish for tech. Qualcomm has an additional news catalyst from yesterday's announcement that they authorized a $10 B buyback plan. Qualcomm looks to be exiting oversold territory on the daily RSI. It's just under 15 forward P/E right now, with PEG under 0.5 and...

ChristopherCarrollSmith

The South Korean show Squid Game dramatizes, in part, the extremely high household debt levels in that country. With household debt-to-GDP highest in the world, South Korean 30-somethings owe an average of 270% of their annual income. Those are the kinds of household debt levels that could either plunge the country into recession as credit tightens or cause...

ChristopherCarrollSmith

Bond funds like the SPDR Portfolio Mortgage Backed Bond ETF (SPMB) often look like money-losers when you view their returns on a non-adjusted basis. In this case, the price is down about -0.74% over the life of the fund. The picture looks very different when you adjust for dividends. For SPMB, the return changes to +46.09% over the life of the fund: ...

ChristopherCarrollSmith

After the IPCC's recent report showing that the North Atlantic Current may be on its last legs, I decided that I needed to diversify away from the US and Europe a bit. (If the North Atlantic Current fails, it would cause massive, disruptive climate change for Europe and North America.) So I committed to look for opportunities in some country ETFs. The one I've...

ChristopherCarrollSmith

Ethereum is getting an upgrade known as EIP 1559, which goes into effect August 4. www.reuters.com The upgrade does three things: 1) It increases block size 2) It stabilizes miner fees 3) It burns a portion of each miner fee to limit supply The upgrade is widely...

ChristopherCarrollSmith

The headline: vaccinated people are getting and spreading Delta This afternoon the CDC announced that a Delta variant outbreak in Massachusetts infected a lot of vaccinated people. The vaccines provided protection against death and hospitalization, but less-than-expected protection against infection and transmission. The disturbing data helps me make sense of...

ChristopherCarrollSmith

Diversifying your strategy There are lots of ways to "win" at investing. For diversification, it can be useful to bet on a lot of different strategies, because often when one strategy starts to go wrong, another will start to go right. But unless you're an expert coder with a lot of free time, you probably can't actively manage multiple different strategies...

ChristopherCarrollSmith

My largest single position right now is La-Z-Boy, and the consolidating price action the last few days is telling me the time may be right. Deep Value La-Z-Boy offers a 2.1% forward dividend yield and currently trades at about 10 forward P/E, .74 forward P/S, and a fantastic 5.6 P/FCF. The low price multiples on this wonderful cash cow are well below the...

ChristopherCarrollSmith

The Study I ran an analysis on monthly stock-market returns over the last 20 years or so, to determine which sector delivered the best median dividend-adjusted returns in each month. December 2020 was the last month included in the study. The sector funds included in the analysis were all equal-weighted, although they don't all use identical methodologies or...