Juggling With Knives: Profits, protection and planning for volatility in stocks, bonds, real estate, and real life.
This website is based on my book, Juggling with Knives. Both the book and website are about volatility in everything from stocks and bonds to real estate, and real life topics such as jobs and education.
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I run two other investing websites, Jubak Picks and Jubak Asset Management. So how does Juggling With Knives fit in that group? With a subscription at $79 a year you get everything that appears on my free JubakPicks.com website (1 to 2 posts a day plus buys/sells/updates on three portfolios) plus an additional 1 or 2 posts a day, including a special post on volatility on most days, plus access to my new Volatility Portfolio. My premium site, Jubak Asset Management, JubakAM.com to its friends, offers for $199 a year everything on Jubak Picks, plus everything on Juggling With Knives, plus exclusive posts that include Sector Monday, Friday Trick or Trend, Saturday Night Quarterback, and my daily Notes You Can Use Mini Blog. Oh, and videos where my smiling face explains the markets. If you’d like to step up to a JubakAm.com subscription click here. (You’ll get full credit for what you paid to subscribe to Juggling With Knives.)[stock-ticker name=”Ticker”]
Yesterday after the close of trading Judge Richard Leon gave the go-ahead to AT&T’s (T) acquisition of Time Warner, the owner of HBO and other content. The ruling is a green light to other vertical mergers in the media sector. The judge rejected the government’s attempt to block the deal. The Trump administration made a very traditional argument that the merger would stifle competition and lead to higher cable bills–which it almost undoubtedly will. But the judge sided with AT&T’s assertion that it had to grow to survive against the competition posed by Amazon, Netflix, and Google. The ruling, then, is a blue print for a wave of vertical media mergers in which distribution companies, such as cable operators, buy up content creators.read more
Maybe you missed it amidst all the noise about the G7 meeting and the summit with North Korea, but… Argentina has asked the International Monetary Fund (IMF) for a $50 billion loan to support the country’s economy and currency. The IMF is expected to approve the request at its June 20 meeting. Approval would release 30% of the loan, or $15 billion. And in Italy new Finance Minister Giovanni Tria said that Italy’s new government has no intention of leaving the euroread more
Of the five ETFs in my Perfect 5 ETF Portfolio only one has outperformed the S&P 500. Since I added it to the portfolio on October 5, 2017 the PowerShares KBW Bank Portfolio ETF (KBWB) has gained 11.01% through 3:30 p.m. on May 22.read more
This market indicator is signaling trouble ahead–in 2020 (Strange: That’s the same year the CBO estimates the annual U.S. budget deficit will hit $1 trillion.)
Earlier this evening I wrote about the unusual inversion in the VIX Fear Index which had futures for the CBOE S&P 500 Volatility Index (VIX) priced to show more risk in the near future than in the far future. Normally the price curve runs in the other direction since the near future is usually more predictable than the far future. Near future and far future are relative terms in the financial markets. In this case we aren’t talking about the difference between short-term 3 month Treasury bills and 10-year Treasury notes. The VIX curve stretches out from future contracts that expire in a couple of weeks to contracts that run for 40 days or more. But a market indicator that does focus on a longer time horizon is also indicating trouble ahead for 2019 or more likely 2020.read more
In a post earlier today I argued that the plunge in U.S. stocks on March 22 was due to investor’s and trader’s suffering from an exhaustion of sentiment. They simply couldn’t see enough reason to the upside to stay in the market against a tide of pessimistic sentiment. I should have called it an exhaustion of good news. But “exhaustion” is also a pattern familiar to technical analysts who look for these periods when all the buyers or sellers are committed to the current trend so that there are no new buyers or sellers to drive the market higher or lower.read more
If you spend a significant part of your day staring at your computer to watch the markets, you know that, perplexingly, the traditional safe havens for mitigating portfolio risk haven’t been working very well. Now Goldman Sachs has put its computers and data crunchers to work and has reached the same conclusion as the anecdotal evidence suggested. Goldman has tagged this a period of “diversification desperation.”read more
It’s only March but I’m rethinking my take on 2018.When the calendar pages turned over into 2018, my take on the year was that for stocks the first half would be much like 2017: Despite rising interest rates from the Federal Reserve, there was enough earnings growth to move stocks up even from near record highs. The bond market would be more problematic with those interest rate increases keeping downward pressure on bond prices and upward pressure on bond yields. With inflation still relatively quiescent, though, the downward trend in bond prices would be relatively gradual. It was the second half of the year that investors had to worry about, I thought then.read more
The market has finally (and probably only momentarily) stabilized enough for me to rebalance my Volatility Portfolio. My intention was to rebalance at the end of January but then stuff happened. You know 9% drop in the Standard & Poor’s 500, huge spike in volatility (as measured by the CBOE S&P Volatility Index (VIX) anyway), correlations shifting all over the place. But after the portfolio’s 53% gain in 2017 and with the changes in the market’s risk profile that are emerging, this portfolio badly needs a rebalance. And here it is. The portfolio is going into this rebalancing with 12 positions. It’s going to come out with 12 positions, although not the same 12 positions and not with the same weights for each positionread more
When I started my Volatility Portfolio back in January 2017, I really didn’t have much more in mind than a conviction that in this market traders and investors and traders could score market beating returns from taking advantage of market and economic volatility. I didn’t narrow my approach to volatility to one or two aspects or markets, but instead followed a wide menu approach to volatility as a characteristic stretching across markets from real estate to bonds to education to stocks. That menu as based on the research I’d done for my February 2016 book Juggling with Knives: Smart Investing in the Coming Age of Volatility. Certainly the return on this portfolio for its first year of operation confirm this wide-menu approach. The portfolio showed a total return of 53.06%–assuming equal initial weightings in each position–as of December 31, 2017. That qualifies, I’d say, as beating the market in 2017. The total return on the Standard & Poor’s 500 stock index was 21.64% in 2017. But in that first year of operation I found a more focused goal for the Volatility Portfolio too.read more
Back in October 2017 I set up a very simple portfolio of 5 ETFs with the goal of beating the performance of a Standard & Poor’s 500 ETF (so that’s the benchmark) with less risk (because of the added diversification.) I said that I would rebalance this portfolio as needed–or on a six month schedule (which ever came first.) But that this would be a relatively passive portfolio of passive ETFs–but with some active management thrown in by way of those shifting allocations. Well, the portfolio certainly isn’t six months old, but we have flipped the calendar page into 2018 so I’m going to do the first performance report now and at the same time do an initial rebalancing of assets.read more