28 November 2016: Bull or bear?

bull-bearThere is some fuzziness among investors about the state of the market: are we in a bull or in a bear market? If we follow the logic of time, we should be entering a bear market shortly. But if we look at the behaviour of investors, everything points to the fact that we are in a bull market that will continue for some time. It has been very long since we have seen a real general drawback in stock prices that is characteristic for a bear market. And stocks are priced not very cheaply. That would suggest that a bear market is around the corner. However, time is a factor. Every month that a bull market lasts longer without a substantial gain in stock prices will make it more unlikely that we will be entering a bear market in the near future. But there is a major disturbing factor: interventions by central banks. It looks like these interventions have a dampening effect on the traditional cycle of bull and bear markets. Japan has shown us that markets can end up in some sort of intermediate state for many, many years. Is that the outlook for US markets? Or will the election of Donald Trump make everything different?

white-chapel-logo-smallLast Friday, the Day after Thanksgiving Day, US markets were open for only a limited number of hours. All major markets were able to squeeze out some more gains, however. The Dow, NASDAQ and S&P 500 all made modest gains of around 0.35%. Volatility eased and our XIV ETNs added more than 0.5%. Our return for the year closed the week at just above 320%.
White Chapel did not give a trading signal. Our model is not even considering a switch. It is expecting volatility to remain low or to get even lower.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter





Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 399%.

ta_v05-small-invLast week, Tim organized a conference, that took place at his alma mater, Tilburg University. The conference focused on the ideas of the university’s founding father, Martinus Cobbenhagen. One of the speakers at the conference was Erik Borgman (pictured below), professor of theology. A few years ago, he was selected as one of the most innovative thinkers of the Netherlands by Trouw, one of the Dutch national newspapers. As part of his contribution to the conference, professor Borgman asserted that we should stop thinking that there is a solution to societal problems, stop trying to manage the world we live in. We need to accept that it is not tools or tricks that we are looking for. What we need is contemplation, in order to have a better understanding of the world we live in, of what other people need and what it is that is politically demanded from us. Instead of building models into which we can feed data in the hope to find the solution to problems, we should ask ourselves: do we see each other, do we understand what the real questions are? To Erik Borgman, the election of Donald Trump as the next President of the United States, should be considered an eye-opener: “We have overlooked a lot of people. And that is not good, at any level”.