2 March 2017: Bubble territory

Warren Buffett, the Oracle of Omaha, doesn’t think we are in bubble territory. Yet. (And, frankly, he doesn’t care if it were the case, since he regards investments in stocks as an investment in businesses. And sound businesses will make good profits in the long run.) Bank of America Merrill Lynch raised its forecast for the S&P 500, because it believes that investors are getting over-optimistic and that the years-long market rally will end soon: “We think that we are entering a typical end-of-bull-market rally, where fundamentals take a back seat to sentiment and technicals”. The question is, however, how long will it take before this bull market comes to a halt? Rising interest rates and an impossibility for President Trump to convert most of his ideas into shared policies might cool off the stock markets enough to give this bull market its ninth life.

white-chapel-logo-smallThe Dow took another barrier yesterday: that of 21,000 points (+1.46%). The S&P 500 and the NASDAQ also made substantial gains of more than 1.3%. Volatility eased: the VIX closed almost 3% lower. Our UVXY ETFs had to take a step back and lost more than 4%. It could have been worse, since the UVXY saw a comeback from an intra-day loss of almost 10%. Return since the start for our model dropped to 239%.
White Chapel did not give a trading signal. Our model moved a small step closer to a trading signal, but it is not clear whether or not it will reach the threshold before moving away from it.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$33,898

+238.98%

-15.91%

-15.9%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 185%.

There’s something brewing in These Dutch Guys‘s kitchen recently. For that reason, Tim and René met yesterday at the Tilburg University campus. They spent the best part of the day talking over the specifics of what is in store. During brainstorming sessions like these, which are typically inspirational, fast-paced and fun, while productive at the same time, they both feel in their element. Needless to say that they can’t wait to share the details with you, but since the preparation work extends into the weekend, there is not much they can say about it at this moment.