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Marko Kolanovic Weighs In On This Week’s Dramatic Factor Rotations, Delivers Near-Term Market Outlook
"By just looking at the price of the S&P 500 — not far from all-time highs — one cannot see
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If there is one advisor who drove the trade war, it is Lighthizer. https://foreignpolicy.com/2019/08/02/trump-hired-robert-lighthizer-to-win-a-trade-war-he-lost/
So watch for any sign that Lighthizer’s star is dimming and Munchin’s is rising.
The pressure on Trump is rising. He is certainly aware that he’s painted himself into a corner.
The momentum -> value swing is very interesting.
Eyeballing MTUM vs VLUE factor ETFs, it looks like for most investors it will have potentially erased about 3 months of outperformance vs the broader market.
In other words, if Joe was 100% in MTUM and Sally was 100% in VLUE, Joe has lost all his outperf vs SP50 from late May and Sally has recovered all her underperf vs SP50 from late May.
Realistically, most Joes would have been 30% MTUM 70% SP50 and most Sallys would have been 70% SP50 30% VLUE. Same period of clawback but the amount of out/underperf erased would have been smaller.
Using rel perf MTUM and VLUE vs SP50 from 12/31/18 to 5/31/2019, 30% MTUM Joe outperf’d SP50 by 0.6% and 30% VLUE Sally underperf’d by -1.9%. From 5/31/2019 to 9/10/2019, Joe underperf’d by -0.9% and Sally outperf’d by +1.3%. From 12/31/2018 to 9/10/2019, Joe outperf’d by 0.3% and Sally underperf’d by -0.5%.
Even 100% MTUM Joe outperf’d by 1.0% and 100% VLUE Sally underperf’d by -1.8%, from 12/31/2018 to 9/10/2019.
60/40 buy and hold? (I kid…I think.)
Been long puke for awhile, nice to see it be edible again.