Todd Sullivan | TalkMarkets | Page 30
Hedge Fund Manager, Owner of ValuePlays and Angel Investor
Contributor's Links: ValuePlays Rand Strategic Partners
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. ...more

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Economies Drive Markets
Economic indicators provide investment signals well before investor market psychology begins to shift.
Private GDP Continues Its Rise
GDP came in at 3% today despite two hurricanes… that means we ought to see Q4 above 3% also as reconstruction begins. It’ll be the first time we’ve seen 3% plus growth for three consecutive quarters since before the financial crisis.
Invest In Well Defined Behavior
Investing is a process which must look through a fog of unknown using past experience.
Current Indications Are For Higher Equity Markets
The global economic expansion continues unabated. Recent, data indicates there may even be some acceleration occurring.
Household Employment & Auto Sales Support Growing Economy
Today’s jobs report showed a loss of US jobs. This is but hurricane-induced. All the underlying data continues to support a growing economy and thus equity markets.
Dollar Rises As Capital Seeks Returns
Emerging market investors have borrowed locally and transferred capital to Western nations especially the US. Much of this has been a safety trade. It has overwhelmed the historical cultural expectations for investment returns.
Rate Spread Positive For Equities
One of the keys to long-term investing on which Wall Street seems to have lost its understanding is the relationship between short-term vs. long-term rates.
The 10yr/T-Bill Spread Positive For Equities
The 10yr/T-bill spread is telling a different story than the media.
The Dollar & Oil
The US$ has continued to fall without an immediate response from $WTI. Although the inverse pattern is fairly strong, it is not a lock-step daily pattern. We should see a sharp rise in $WTI the next month if the algorithms reassert themselves.
Despite Pessimism Economy Doing Just Fine
Considerable pessimism remains in the markets as economic expansion continues. Several more years of economic expansion and higher markets are ahead in my opinion. Investors should be adding capital to Equity and avoid Fixed Income.
People Still Using CAPE For Valuation?
CAPE has an issue which misses a significant market perception. The issue is earnings are adjusted for inflation which causes the CAPE ratio to rise over time.
Dr. Copper Is Back… Where’d He Go For 8 Years?
Commodity prices are priced in US$ globally and cycle pricing is more about the Trade Weighted US$ and global capital flows than anything else!
Correction Calls Won’t Be Answered
There are many calls today for a correction, but economic activity continues to move forward and markets follow. Lately it seems many well-known and media-popular forecasters have called for another market/economic correction.
Equities Rise Should Continue
Economic data and equity markets are highly correlated over time. The correlation is not day-to-day or even month-to-month as the media attempts to connect the dots on a daily basis, but over several years the connections become apparent.
Is Oil About To Spike Higher?
Momentum investors look for levels at which price acceleration suddenly occurs and then try to trade it. The US$ could fall faster from this point if enough believe it will.
Real Private GDP ~40% Higher Than The Real GDP
The true measure of the US economy is the Private GDP. Government spending has been conflated into GDP and often skews true economic conditions.
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