Warning: Declaration of YOOtheme\Theme\Wordpress\MenuWalker::walk($elements, $max_depth) should be compatible with Walker::walk($elements, $max_depth, ...$args) in /home/customer/www/lmtr.com/public_html/wp-content/themes/yootheme/vendor/yootheme/theme/platforms/wordpress/src/Wordpress/MenuWalker.php on line 8

THE LMTR EDGE:

Join over 25,000 investors and get alerts for:
  • Market Timing Reports
  • Sentiment Updates
  • Chart of the Week
  • Weekly Podcasts
  • The Magic Number - Top Stocks

Category: Chart of the Week

All the Glitters is……..Gold?

By John Del Vecchio and Brad Lamensdorf

Today, cryptocurrencies are all the rage. Bitcoin has hit new highs as it has increasingly captured the public’s imagination and gained support from institutions.

The new talk is that it’s an inflation hedge.

It may turn out though that the new most well-known inflation hedge is ready to rock.

That’s right. We are talking about gold.

While gold mining stocks have never been more profitable in 25 years, the amount of capital expenditures into the industry is at a 70-year low. This under-investment is setting the stage for better return on equity and higher prices in general due to supply constraints from the lack of Capex.

Take a look at the chart:

All the Glitters is……..Gold?
All the Glitters is……..Gold?

After decades of value destruction, gold miners’ free cash flow yield is surging.

This comes at a time when private investments in exploration have plummeted. Investment has dwindled to a trickle compared to the prior boom.

All the Glitters is……..Gold?
All the Glitters is……..Gold?

While other sectors are grabbing all of the headlines and sucking all of the oxygen out of the room, there’s a powerful set up occurring in an old inflation standby.

Fact is, sectors ebb and flow. What’s not hot can quickly ignite fire and huge trends can emerge. This set up is taking shape in the gold miners. 

It’s not just bitcoin that can rally 1,000%.

Big moves and great returns potentially lie ahead.

Speaking of returns…In case you missed it…

Brad hosted a webinar on February 9th talking about achieving better risk-adjusted returns in an overheated market. 

The Active Alts SentimenTrader Long / Short Strategy returned 25.87% in 2020 compared with 7.86[1] % in the Credit Suisse Long / Short Index.

What’s more, is that the Active Alts SentimenTrader Long / Short Strategy experienced a 9.99% draw down and held an average cash position of 19.4%[1] for the year.

The webinar dives into:

  • How to navigate the rocky markets we have been living through
  • How to generate alpha on the long and short side of the market
  • The power of our proprietary exposure gauge and what it means for investment returns in current market conditions

If you missed the webinar, you can watch it here!

Brad Lamensdorf Jason Goepfert Webinar

 

 

 

 

 

 

General Disclaimer
Active Alts, Inc. (“Active Alts”  or the “Manager”) is an investment adviser registered with the state of Connecticut. Active Alts manages the Active Alts SentimenTrader L/S Strategy and SentimenTrader serves as the research/index provider for the strategy. Registration with the state of Connecticut does not imply a certain level of skill or training.
The information set forth regarding securities and investment advice was obtained from sources which we believe reliable but we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities. The performance quoted above represents past performance and current performance may be lower or higher than the performance date quoted. Past performance does not guarantee future results as investment returns may vary from time to time depending upon market conditions and the composition of the strategy.

SENTIMENTRADER DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. Investors should consult their tax advisors before making investment decisions, as well as realize that past performance and results of the strategy are not a guarantee of future results. The Active Alts SentimenTrader L/S Strategy is not intended to be the primary basis for investment decisions and the usage of the strategy does not address the suitability of any particular investment for any particular investor.
The Standard & Poor’s 500 Index is provided for informational purposes only. Indices are not indicative of the strategy and may not be suitable for comparison purposes.   Indices that may be shown do not reflect the deduction of advisory fees, commissions or other transaction charges.
Fees charged by the Firm are negotiable and may vary by client.

Before making an investment, you should consider your goals, objectives, time horizon and risk tolerance to be sure that this investment is suitable for you.  There are no guarantees that the strategy will perform as it did in the past. You could lose money and you should not invest unless you can afford to lose some or all of your invested funds.

Calculation Disclaimer
Dividends are included in the performance results. The Manager have also calculated the net results by applying the highest management fee to be charged to advisory clients. Results will vary based on the amount of the fee applied. The results were also calculated by rebalancing the long and short portfolios on a weekly basis.  The portfolio selection was and will be generated from the proprietary Active Alts stock selection process which is based on quantitative factors and mechanically driven. Commissions were added. No taxes were deducted; no borrowing costs were added; and no ex-dividend costs were included from the short portfolio.
Downside deviation is a measure of downside risk that focuses on returns that sell below a minimum threshold of a Minimal Acceptable Return (MAR).
Sharpe ratio is the average return earned in excess of the risk free rate per unit of volatility of risk.
Time to recovery is the duration of time it takes to restore the value lost.
Beta is a measure of a stock’s volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0.
Annualized volatility – Historic volatility measures a time series of past market prices. Implied volatility looks forward in time, being derived from the market price of a market-traded derivative (in particular, an option).
Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy. It measures the largest single drop from peak to bottom in the value of a
portfolio (before a new peak is achieved).
(1) Indicators drive the exposure while a proprietary Long & Short portfolio are rebalanced monthly for the strategies equity drivers.
(2) Commissions were added to the exposure rebalance as well as the monthly stock rebalance.

See More Chart of the Week Posts

The Good Times are Rolling but the Market is Climaxing

By John Del Vecchio and Brad Lamensdorf

Buying climaxes are exploding!

This is bearish for the market.

A buying climax is when a stock makes a 52-week high but closes down for the week.

Take a look at the chart:

The Good Times are Rolling but the Market is Climaxing
The Good Times are Rolling but the Market is Climaxing

The red bar represents buying climaxing, and the blue bar is selling climaxes. As the chart shows, today’s situation is 180 degrees from where buying and selling pressure were near the COVID lows. Back in late March, massive selling climaxes occurred Right at the bottom!

Today, buying climaxes are exploding. These stocks are hitting new highs but closing down. As a result, those moves higher are running out of steam. The distribution of stock is increasing.

This is a bearish sign for the market.

This is another reason to starting planning hedges accordingly.

The Active Alts SentimenTrader Long / Short Strategy uses dozens of proprietary indicators, including buying and selling pressure, to adjust exposure based on market risks. SentimenTrader is a leading research firm with thousands of clients in over 50 countries around the world.

To learn how these strategies may guide your investment decisions over the coming months, book a complimentary call with Brad here.

 

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.

 

A Horror Movie for Shorts Will End in Blood for Careless Investors

By John Del Vecchio and Brad Lamensdorf

The headlines are filled with talk of massive short squeezes and huge moves in companies of dubious quality.

The Goldman Sachs Non-Profitable Technology Index illustrates this point very clearly. The stocks in this index consist of non-profitable U.S. listed companies in innovative industries.

As the chart shows, the index meandered about for years. There were periods of both good and poor performance but nothing out of the ordinary.

Until the lows in 2020.

The index fell sharply from 134.6 on February 20, 2020 to 81.7 on March 18th as investors ran for the exits during the COVID scare. That level represented a multi-year low.

A Horror Movie for Shorts Will End in Blood for Careless Investors
A Horror Movie for Shorts Will End in Blood for Careless Investors

This chart says it all.

It’s a been like a horror movie for short sellers in recent months. The index has rocketed higher from 81.7 to 393.1 with no meaningful pullbacks.

As we have discussed before in Chart of the Week, companies with the worst fundamentals are often up the most in recent times. We know how it usually ends for these stocks. With a lot of blood and guts.

It’s never too easy for long in the markets. That’s why what’s uncomfortable is often the action we should be taking.

Now is the time to get serious about hedges.

While the move off the low for technology stocks losing money has been breathtaking, we have never seen a market sustain a parabolic move.

The Active Alts SentimenTrader Long / Short Strategy returned 25.87% last year with an average cash position of 19.4%.

Want to know how to position yourself in the market over the coming months and what Active Alts’ proprietary indicators are signaling? Book a complimentary call with Brad here.

Past performance is not indicative of future results. Active Alts is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader.

Partying Like it’s 1999

By John Del Vecchio and Brad Lamensdorf

Small speculators are partying like it’s 1999.

Not since the Internet Bubble has option activity from small options traders, those trading 10 contracts or less, has been so speculative.

The chart below, courtesy of SentimenTrader, shows the put-to-call ratio nosediving.

The result, with this call buying activity, is that retail traders have become more speculative than any time in two decades.

Partying Like it’s 1999

Collectively, the impact of small traders’ speculation has increased significantly.

Small trader call buying is equivalent to over 9% of the volume on the New York Stock Exchange.

That’s a new record!

 

Partying Like it’s 1999

The speculative fervor can continue. However, in our experience, extremes in both greed and fear lead ultimately lead to tears for those too greedy or too fearful.

Now is the time for hedges to be prepped.

Small traders don’t know anything you don’t. Instead, they’re falling over each other placing bets to satisfy their greed.

Active Alts has partnered with SentimenTrader to use contrarian and other indicators to measure risk and manage market exposure. The Active Alts SentimenTrader Long / Short Strategy returned 25.91% in 2020.

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.

You may book a call here.

DISCLOSURE: LAMENSDORF MARKET TIMING REPORT

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s Nor any investment Advisors.

Past performance is not indicative of future results. Active Alts is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader.

Bitcoin isn’t the Only Market that’s Flying

By John Del Vecchio and Brad Lamensdorf

Bitcoin news sucks all the oxygen out of the room. However, it’s not the only market rallying that may indicate inflation is afoot. 

Take a look at copper.

Bitcoin isn’t the Only Market that’s Flying
Bitcoin isn’t the Only Market that’s Flying

Or oil.

Bitcoin isn’t the Only Market that’s Flying
Bitcoin isn’t the Only Market that’s Flying

Or corn.

Bitcoin isn’t the Only Market that’s Flying
Bitcoin isn’t the Only Market that’s Flying

Or soybeans.

Bitcoin isn’t the Only Market that’s Flying
Bitcoin isn’t the Only Market that’s Flying

These commodities are flying and that is inflationary.   

It is no coincidence that the TLT’s are breaking down.

Higher rates could put a lot of pressure on market multiples.   

Beware.   

It’s time to put on hedges. 

The Active Alts SentimenTrader long / short strategy manages exposure based on dozens of proprietary risk indicators. To learn more about how to manage risk from here, book a call with Brad.

2018 - All Rights Reserved © LMTR, LLC

Privacy Policy - Contact Email: info@lmtr.com