The VP Research Blog
A blog about financial markets and the VP investing framework
Crash Signal warned clients January 5th
Variant Perception keeps clients informed of the state of market health with specific buy and sell signals. Here is an excerpt from a weekly Tactical piece that went out to clients on January 5th. If you are an institutional client and would like to receive Variant...
Rare Buy Signal on Gold; Potential Short-covering Rally
Over the past three weeks we have had two rare buy signals on gold. Previous buy signals have returned 5-10% over the next month. The signal is a measure of selling or buying exhaustion. The returns are very good, and while not every single signal works, the odds are...
EM Money Growth Improving
Capital outflows from emerging markets continued into the second quarter of 2015. Once again the outflows mainly emanated from China and from CEE and Russia. The flipside is growth Treasuries held in custody for foreign accounts is stuck at zero percent. This is a...
Buyback Boom Peaked, Debt Hangover Ahead
Over the past four years, companies that have bought back their stock have outperformed the market significantly. Most companies did not finance the buybacks with internal cash flow and borrowed at low rates to buy their own shares. The cost of debt is mispriced, so...
Profit Cycle Turning Down
The corporate profit cycle is now turning down, and our leading economic indicators point to further declines in return on equity (ROE) and profit margins. This is not a short-term call on equity markets but a major structural factor investors should bear in mind in...
Higher Volatility and Credit Spreads Ahead
All of our leading indicators for credit spreads and volatility point to wider volatility and higher credit spreads over the next two years. The credit cycle is long in the tooth, and the best predictor of future credit spreads is the lagged growth in lending. For a...
US Unemployment Rate is Not its Former Self
Structural factors are ensuring that the unemployment rate in the US today is not what it was in periods past. Yellen has seemed to be more in the camp that the decline in the labour participation rate (PR) since the crisis has been mainly cyclical in nature and...
Market health warnings
Variant Perception keeps clients informed of market themes, trading strategies and tactics. For example, here is something we wrote for clients on August 12th before the recent market correction. If you would like to become a client, please contact...
Despite the rout, excess liquidity will prove to be supportive
Stock markets are experiencing a classic crash pattern. Volatility has spiked and sharp sell offs are often being followed by powerful rallies. As with previous crash patterns, we would expect markets to continue to gyrate wildly for around the next 8 weeks,...
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