24 January 2018: Davos

The World Economic Forum (WEF) is holding its annual meeting in Davos, Switzerland. The rich and those who are famous in business, politics, science or otherwise are gathering to address the Great Problems of the World. While most economies worldwide are running at full speed and stock prices are skyrocketing, the mood at the WEF cannot be judged as ‘optimistic’. Under the moniker of Creating a Shared Future in a Fractured World, world leaders discuss such matters as political polarization, climate change, growing inequality, tech monopolies and the growing military tensions between the superpowers.
Which reality is the real reality: that of booming economies and stock markets or the one that includes all the concerns expressed? If the latter is the case, stock markets might get a reality check soon. Optimism among stock market investors must align itself with what happens in the real world, one day or the other.

white-chapel-logo-smallUS stocks mostly rose on Tuesday, with the S&P 500 and the NASDAQ ending at an all-time high. The Dow finished flat (-0.01%). The S&P 500 closed up 0.2% and the NASDAQ gained 0.71%, to an important degree fueled by Netflix shares, which rose 10% after better-than-expected quarterly results. Volatility was on the rise nevertheless. The VIX closed 0.63% higher and UVXY ETFs even gained 3.7%. XIV ETNs closed 2% lower. Futures traders appear to be a bit more pessimistic than stock traders at the moment.
Danny Daredevil was yesterday’s winner. His RSS closed at -8%. Adventurous Anny´s RSS remained unchanged at 23%, as she is still holding a cash position. Solid Suzy and Lazy Larry had to take a small step back and their RSS dropped to 113%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

-7.60%

-9.40%

-9.40%

-4%

Adventurous Anny Cash 6 March 2017

22.91%

0.00%

0.00%

26%

Solid Suzy XIV 6 March 2017

112.69%

5.49%

5.49%

134%

Lazy Larry
XIV 6 March 2017

112.69%

5.49%

5.49%

134%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

Perfect Beings. (No, These Dutch Guys are not referring to themselves.) It is the name of a band from Los Angeles, California. They did what Yes achieved with its groundbreaking album Tales Of Topographic Oceans in 1973: release a double album which consists of four songs, each on one of the four sides of the LP. (Not to worry: the album of Perfect Beings is also available as a CD and on the major streaming platforms.) The album is aptly named Vier, which is Dutch (or German, for that matter) for ‘four’.
At the moment of writing and recording of Vier, Perfect Beings consisted of three band members. Each of them was responsible for one side of the double album and the remaining side was a joint enterprise. The result is stunning: a journey through styles, moods, influences, etc. On a scale from 1 to 10, a judgment of the album’s quality comes closer to tien than to vier.