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Why Stock Market Could Be Turbulent During Present Earnings Blackout Period

As the chart below illustrates, a great many public companies are entering blackout periods before regular quarterly results announcements. The blackout periods prevent companies and insiders from buying or selling their own stock based on inside information about earnings results not available to everyone else. But blackout periods these days also leave the stock market and investors very vulnerable to downturns since record corporate buybacks have been a major support for the stock market. In other words, without support from corporate buybacks we are entering a period in which the stock market is particularly vulnerable on the downside, even more so if there’s any market-moving negative events. So be careful!

Why Stock Market Could Be Turbulent During Present Earnings Blackout Period
Why Stock Market Could Be Turbulent During Present Earnings Blackout Period

Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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