Read on Twitter
1/ Normally a huge fan of $JPM Michael Cembalest, but today his remarks lacked context wrt one of the most honest and accurate economic commentators in our business-- @EconguyRosie --by calling him an "Armageddonist"
2/He basically puts the "Armageddonists" into the AGG and compares them to the SPX.
Rosie's recommendations last decade...ie gold, LT UST's (2019), equities (2012ish?). He has been bullish and bearish with solid timing and astute observations on opportunistic asset classes.
Rosie's recommendations last decade...ie gold, LT UST's (2019), equities (2012ish?). He has been bullish and bearish with solid timing and astute observations on opportunistic asset classes.
3/Doubt JPM WM clients hold 100% SPY?
JPM also has an asset allocation metric for its return quilt.
Roughly allocated to below:
SP50025%
R200010%
EAFE15%
EME 5%
AGG25%
ST USTs 5%
High Yld 5%
REITs 5%
Comdty 5%
JPM also has an asset allocation metric for its return quilt.
Roughly allocated to below:
SP50025%
R200010%
EAFE15%
EME 5%
AGG25%
ST USTs 5%
High Yld 5%
REITs 5%
Comdty 5%
4/Perf: 2010-2020Q3
JPM AA BM c. 7.1% CAGR / 8.4% vol (AA unch thru Q320)
AGG: c. 4.0% CAGR / 3.4% vol
Our tactical composite c. 6.55% / 8.0% vol. We have been called bears occasionally. (contact us for #'s/disclosures)
Static AA Vols increasing late cycle
JPM AA BM c. 7.1% CAGR / 8.4% vol (AA unch thru Q320)
AGG: c. 4.0% CAGR / 3.4% vol
Our tactical composite c. 6.55% / 8.0% vol. We have been called bears occasionally. (contact us for #'s/disclosures)
Static AA Vols increasing late cycle
5/But equity investors are looking at this valuation environment...perhaps the biggest equity bubble in U.S. history.
6/Potentially a low expected equity return environment:
CAPE is c. 31x...only 2 periods like this are 1929 and 2000 and those 10yr returns were abysmal.
SPX 10yr E(R) -5% to +5% & -50% haircut along the way?
OR
T-bills E(R) 1.5% to 2% over next 10 yrs w/ <-5% down?
CAPE is c. 31x...only 2 periods like this are 1929 and 2000 and those 10yr returns were abysmal.
SPX 10yr E(R) -5% to +5% & -50% haircut along the way?
OR
T-bills E(R) 1.5% to 2% over next 10 yrs w/ <-5% down?
7/Btw negative real yields in the 1940's didn't avoid some serious equity bear markets and vols for all assets seem to be increasing (ex-MOVE).
Yes, and we are nothing like Japan....
Yes, and we are nothing like Japan....
8/US companies are more profitable with higher ROE's but are there any more taxes to cut while labor force growth flat lines?
How much more juice can we get from under-investment?
How much more juice can we get from under-investment?
9/Armeddon it yet?
