5/18/16

Chicken Little's Criteria for becoming Bullish

In his 1963 essay, Sir Karl Popper writes, "the scientific status of a theory is its falsifiability, or refutability, or testability."

Sir Karl Popper 
Chicken Little's ramblings are not a scientific theory. However, in a Popperian spirit, I examine five criteria, which would make Chicken Little bullish. 

5/4/16

Chicken Little Portfolio Performance April 2016

In April 2016, the Chicken Little Portfolio lost 0.97% while the Dow Jones Industrial Average gained 0.61%.

4/27/16

Federal Reserve Fools Chicken Little Again!


Can US Federal Reserve Chair Janet Yellen Fool the Markets yet again? My guess is no, but that just shows that I am as gullible as Charlie Brown.


Janet Yellen is the Lucy of Central Bankers. 

4/13/16

Chicken Little is Sick from Volatility; remaining Vigilant


Today the Dow Jones Industrial Average closed at 17,908. This is just fractionally lower than where it closed a year ago. 

As with the proverbial duck that is calm above water while paddling furiously below, the year-over-year comparison hides incredible swings. 



Stock Market has had wild swings on the way to nowhere



4/2/16

Chicken Little Portfolio Performance March 2016


In March 2016, the Chicken Little Portfolio lost 0.47% while the Dow Jones Industrial Average gained 7.31%.

3/30/16

Chicken Little's Investment Advice


On March 31, 2015, Chicken Little revealed his investment positions (click for Where Does Chicken Little Invest?)  On March 31, 2015 the Dow Jones Industrial Average closed at 17,776. As I write this, the Dow is at 17,761.  So the US stock market, as measured by the Dow, has not changed in a year. While nothing has happened in overall price, there has been a big change from a momentum investor's perspective. 

Chicken Little aims to invest like Rocky fights

What would Rocky do now? Chicken Little says keep it simple. 


3/18/16

Chicken Little Gone Crazy?

We know that Chicken Little is a coward. Now we seem to have proof that he has gone crazy. Not only does he own Treasury bonds yielding under 2%, he has recently purchased more. 

Matthew 19:24 says,  "It is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God." 

Similarly, it is easier to win the Powerball than it is to make money buying US Treasuries at current low rates. Has Chicken Little lost what remained of his terrified, cortisol-filled mind? 



3/4/16

Chicken Little portfolio performance February 2016

February 2016 monthly update for the Chicken Little Portfolio.
In February 2016, the Chicken Little Portfolio gained 1.03% while the Dow Jones Industrial Average gained 0.69%.

You can view the portfolio performance in real time by clicking here.


Chicken Little made two changes in the month of February. First, the long-standing short gold position was closed, and, second, Chicken little added to the 30-year Treasury position. You can read the logic covering the gold short here, and here on buying more low yielding Treasury bonds. The portfolio remains heavily invested in US Treasuries, and modestly short US and international stocks.



A Bit of the Sky has fallen in the start of 2016

2/13/16

Chicken Little Buys Gold to Cover Short Position

Chicken Little's definition of an optimist? Someone who thinks we will have an inflationary depression. 

The Chicken Little investment approach is to have a macroeconomic opinion and to invest consistent with that macro view and momentum (click for a longer explanation of Chicken Little's investment approach). Momentum is the idea that assets prices that are in motion, tend to stay in motion. 


Newton's First Law Applies to Markets

2/9/16

The Nightmare of Low Interest Rates Continues


Interest rates on US treasury bonds continue to decline. Contrary to conventional wisdom, low interest rates hurt the economy. 

Here of some highlights of an article I wrote 18 months ago. US 10-year Treasury yield was 2.4% at the time of article. Currently, the same rate is 1.7% 

"Financial markets live in terror of the day the Federal Reserve raises interest rates. However, we should fear exactly the opposite: a persistent nightmare of low interest rates. Chronically low interest rates signal trouble, and they inflict financial pain. Ominously, a recent economic poll (interpreted correctly) suggests that interest rates are going to fall, not rise. ...

And the bad news is that U.S. interest rates are likely headed lower. This spring, 100 percent of surveyed economists predicted rising rates. And if 100 percent of economists believe anything, they are almost surely wrong."

Click on the image of this homeless senior citizen to read the full article. 

 Low Rates are Unfair to Senior Citizens
Federal Reserve Policy is Punishing Senior Citizens



2/5/16

Playing Offense with your Behavioral Biases

Behavioral finance books tell us that our brains are flawed and cause us to lose money. To survive, we need to play defense, and stop our bias-riddled brains from bankrupting us. 

In this post, I make a suggestion for how an 'irrational' trade may help you. Two wrongs may not make a right, but two behavioral biases may may you richer (or less poorer - to paraphrase Derek Zoolander). 




1/29/16

Chicken Little Portfolio Performance January 2016

January 2016 monthly update for the Chicken Little Portfolio.

This month the sky did fall a little bit. Stocks around the world went down about 5%, which is a lot for a month. However, US stocks are still not far from the all time highs hit in May 2015.
In January 2016, the Chicken Little Portfolio gained 2.25%; the Dow Jones Industrial Average lost 5.45%.

You can view the portfolio performance in real time by clicking here.

Chicken Little changed nothing substantial during the month of November. The portfolio remains heavily invested in US Treasuries, short precious metals, and fractionally short stocks.