A few interesting historical contexts of market corrections/bears….. The header graphic shows the extreme level of capitulation that the markets have expressed through this week. This shows the percentage of stocks above their 200 day moving average. It is nearly as low as the GFC bottom and below all others. There is nothing magic about the number, but when put into historical context shows how this market action compares to previous extremes. As of Tuesday Dec 26, the current market correcti
In search of value....
As you will see in the following pages, we have been hard art work looking for what are the best values in the marketplace. The October selloff as expected has begun to open up opportunities for us. While we have been saying for quite awhile that a correction was due, and that we would continue to see “growth scares”, we have been very patient at adding equity exposure. Rightly so. Now that the market has hit a generic 10% correction, we deem this level as proper to get a bit more proactive on
End of the road or not, It is the new era of US-China relations to watch...
Takeaways from the Intellectus Partners Investment Committee for the week ending Nov 2,2018: At this meeting our mission was to attempt to take a hard look at whether or not we are entering the “End of Cycle” period for the economy and thus the Bull Market that begin in 2013. The Intellectus very bullish call in the Fall of 2016 positioned us well for the run that followed. To see a meaningful correction post a move like that is not surprising. Our Investments & Allocations have had excellent s
Another growth scare...
With the recent volatility we wanted to share some of our thoughts on what is happening , and how we think about these types of interruptions of the Bull Market. Markets are hard to predict, so we do not really spend too much time on predicting them. What we do is look for powerful trends, innovation, great management teams and undervalued companies. Each and every analyst, portfolio manager or trader that interacts with our capital has the same high bar to achieve. Make sure that the capital i
Japan is still a good opportunity for patient investors
Profit margins in Japan are quietly surging. This is a phenomenon that we certainly have been seeing in the US for years, and incrementally in Europe. But, the rate of change in Japan is in fact, far better than the other two. Better yet, as the Wall Street Journal points out, with Net Margins at just about 6%, they have room for further improvement as they still lag these other developed markets. Since Abenomics has begun, the productivity of working age population 25-54 year old has risen sha
Invest with A.I. or die....
Investors throughout history have been utilizing technology to try to get an informational edge in markets. This was true in the famous story of Nathan Rothschilds use of carrier pigeons to get information about the outcome of the Battle of Waterloo ahead of other traders. It was also true in the more recent latency race among high frequency traders who moved from laying fiber between Chicago and New York to funding microwave towers for microsecond decreases in latency. Until recently, the ab
An important test for all markets
As we have been calling for since the end of last year, there is indeed regime change in the markets. Our point was that the framework of the interest rate deck has changed. The next several years will be different because of this. What it means obviously is yet to be determined. But what really strikes me when I look at this chart below is this: The beginning of this enviornment was when we were reeling from the crisis. Frankly, at the time most of the market participants thought we were stil
Does a diversified Index protect you?
We thought that you would find this "white paper" from our long time partners at Polen Capital very interesting. At Intellectus, we need to manage risk on a daily basis. Risk can mean different things to different people. It comes in different forms and most people react to it very differently. A common perception is that diversification, is the primary and only means of reducing risk. In fact, there is an old Investor adage that says, "You make money through concentration, you keep it via dive
An argument for Bitcoin as a store of value
Bitcoin has advantages over gold, and actual currencies as a store of value. If you believe that society will spend a growing percentage of capital on "digital goods/assets" vs physical goods in the future, here is a rationale. When one considers that the cost of putting 1MB of information onto the Bitcoin blockchain is somewhere between $7,000 and $8,000 , it sounds like an expensive way to store information. It would be many orders of magnitude cheaper to store information in a database on a
A pro-cyclical correction and regime change
What is happening in the markets now. Change is sometimes uncomfortable. It’s been too long since we have had a correction, so one was due. We are off more than 5% from the recent high. A 5% correction is a must and needed event to take the speculators out. We typically get two corrections of this size per year. Interestingly, it has been over 400 days since we have had one. Good opportunities begin to present themselves upon these downlegs, but a 10% or more correction could clearly be in the
Another Day, Another Estate Tax Repeal…
Most clients have seen press reports about current tax proposals in Congress that promise significant changes to the taxation of individuals and businesses. H.R. 1, titled the “Tax Cuts and Jobs Act,” was introduced to Congress on November 2nd and is in the early stages of its legislative journey through the House of Representatives and the Senate. Prospects for the adoption of all, some or any of its current components is unclear at this point. One of the elements of H.R. 1 in its current form
Watch this new emerging trend.....
Crypto Currencies, Blockchain and the ICO Crypto currencies are a digital currency that uses encryption techniques to regulate the creation of currency and verify the transfer of funds, operating independently of any central bank. They are built on top of a Blockchain, which is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. While not exactly new, the Blockchain and Crypto currencies may be hitting critical mass and ar
Intellectus Continues to add specialty Advisory talent
We are proud to announce another significant addition to the Intellectus Team. Alice Wu, the former President of Robertson Stephens, Head of Asia Region has joined Intellectus. Alice will be based in our San Francisco office and will frequently be spending time in Asia. Please welcome Alice to the team! Our press release is below: Silicon Valley-based Independent Wealth Management Firm, Intellectus Partners, Hires Alice Wu as Head of Asia Pacific Region, Wealth Creation & Preservation NEW
Buffet strikes again....AGAIN- an update
"If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright." So said Warren Buffet in 2003. My how things change...Great investors are never dogmatic. As you may recall from our post three months ago(Nov 11, 2016), we have been unabashed bulls on the airline sector for a very long time. In a nutshell, we think capacity discipline and the rationalization of the US airline industry are driving significant efficiencies (not to mention the indirect
The coming rebound in IPO's in 2017
We expect that 2017 is setting up to be a year of heightened activity in Advanced technology, leading to a robust IPO market in 2017. A decade of repressive regulations, costs and other aftershocks of the dual crises(2000-02 & 08/09) have created a pressure valve set to burst. The mountain of regulations have kept fast growing private companies private longer and the money followed. Venture Capital, and in particular, late stage capital(growth funds) have allowed the companies plentiful access