November 16, 2017

Job markets could come under pressure from Industry Disrupters

Disruptors enter the marketplace all of the time. Some are louder than others, but they all end up making some impact on the traditional businesses. The popularity of services like Uber, Airbnb, Purple and others could be bad sign for the US Job Markets

"Industry after industry is being disrupted - sowing the seeds for 'Peak Employment' and a reversal of the nice gains in the jobs market over the last several years."

November 13, 2017

US stocks overvalued - selling Allergan

Doug Kass has sold his stake in Allergan and taken it off his Best Ideas List according to TheStreet. 

"I believe there may be more vulnerability to Allergan's 2018-19 outlook than suggested by management or believed by analysts." 

Broader stock market risk
"I believe the U.S. stock market is overvalued and, accordingly, I must have a compelling reason and a positive reward vs. risk to justify the retention of a stock."

November 7, 2017

Risk in investments is always there

The markets are trending higher and making new all time highs. Investors are cheering the bull market in stocks and seeming to forget the downside risks. Doug Kass writes on the dangers of the crowded trades,

"Risk is an ever-present condition that cannot be eliminated, though it can be shifted through time and redistributed in form. 
In today's market many believe that they have achieved protection over risk, but they actually are becoming its servant. And when investors and quant strategies such as risk parity and volatility trending are all increasingly on the same side of the volatility boat, the odds favor that the boat likely will tip over. 
Black Monday -- Oct. 19, 1987 -- came out of nowhere. The Indices were in a bull market and many saw no reason for a decline. At that time, the markets lost more than 20% of its value as volatility advanced to an all-time high of 150 based on the VXO index, which preceded the VIX index. It was caused by a broad adoption of portfolio insurance and represented the first modern-era crash that was driven by machine feedback loops. It won't be the last."

via realclearmarkets

October 18, 2017

Doug Kass on Options

"While options can give market participants the protection they are intended to they also can increase the degree of a counter move once it gets going as those who wrote the protection scramble to unwind their own exposure." 

- via twitter