Bob Elliott

Party on, dude! Blowout jobs number at 272k gets the headline, but there is an interesting story about the innovation economy worth noting. Corporate margins have been at record highs without significant labor force reductions. Declining costs relative to sales is likely a product of corporate investment in areas like automation and digitalization. Many of the companies tied to those themes continue to deliver strong performance. Check out Global X ETFs recent Inflection Points, The Fed vs. the Innovation Economy for more on the topic: https://lnkd.in/dTWqbrD7

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My latest Substack post analyzes $XOM once again catching $TSLA in terms of market cap. Last 5 qtrs: $XOM returned ~$40bb to shareholders via divvies, buybacks. $TSLA: $0.00 That is what really matters. But the key to investing is the second derivative, and as EV sales slow (good for demand for oil, obvs, and for $XOM) I fail to see the Silver Bullet for $TSLA. Why? Because Elon let his product line get old. No amount of robotaxi/FSD necromancy is going to change that. Trade accordingly. Excelsior! --Jim

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May’24 FOMC  Powell sounded dovish in his press conference - some soundbites -Reduced QT size by $ 35 bio, adding uncertainty to duration of QT  -Will reinvest excess principal payments on agencies in UST ie. -Passive QT, active QE - overall Balance Sheet shrinks but duration increases -Pointed to soft indicators of job market to justify restrictiveness of policy  -Reiterated restrictiveness of policy despite resilience of activity & easing FCI -“Higher for longer” is the preferred means of tightening - not hikes -Pinned onus on data to run hot for justifying hikes - ruled out  hikes categorically  -Admitted progress on inflation is slow, delaying policy normalization....but -Rate cuts still on table, unless sustained evidence of upside pressure on inflation  -Rejected there is stag or inflation to dismiss stagflation concerns -Reiterated political compulsions will not hinder actions - elections don’t preclude cuts In sum, if hotter data needs to be sustained for the Fed to even consider hiking. The bar for cutting seems a lot lower.  If we do get a correction in asset markets, the Fed has the option of using FCI argument to turn less restrictive.  If there are isolated bank failures, they will be managed by the FDIC.  Overall a very dovish read and ‘Powell Put’ is very much in play.  “Sell in May” at your own peril  

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The Fed tacitly announced QE via twist in its last FOMC by letting its maturing bonds run off, but reinvesting the principal maturities in its agency portfolio. The passive run off was meaningless in terms of duration and liquidity when there is so much surplus liquidity. But the active purchases which will now be almost 63 bps of GDP equivalent p.a , will continue to grease the asset markets and slow the pace of bear steepening. Add to it the reduction in taper to the tune of 420 bio. Incrementally the markets are getting 420 bio of liquidity and 180 bio of duration purchases p.a. The Fed will keep finding ways to stimulate even if they don’t cut rates. That is as bullish as the Yellen twist in Oct’23, if not more. SPX to 5400 https://lnkd.in/gNx3hUzJ

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Assets managed by RIA's has grow by 229% since 2009 (16% annualized Growth). I've written multiple articles and posts about small funds vs large funds, but TODAY I wanted to highlight some aspects of RIA's (the Registered Investment Advisors) where large amounts of money is held. "Despite only representing 2% of the industry in terms of the number of RIAs, firms with 10,000+ clients manage over $39.3T, almost 1/3 of the industry’s assets." So what does this mean? Well that means a LOT of money is managed by the largest firms ... but here are some trends I am seeing in the RIA space: 🔷 Private Equity firms are acquiring more and more RIA's. The question remains is consolidation a good thing? 🔶 Their customers are seeking more exposure to private asset classes (PE, VC, Private Credit). This is causing some changes in customer demand, business models and structure. 🔷 The vast majority still resides with <$1B AUM, but this also provides more personalized support. What advantages do small RIA's have? #Landons_Thoughts #RIA #Investments #Demand I'm tagging some friends in the space from all across the country - help me out. Which trends in the RIA space do you think are the things WE should be paying attention 👀 to?

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I'm currently having a little fun with the Utility Theory approach to asset allocation. Here's an another quick note at SSRN on the Optimal Hedging of Assets with Pathological Distributions of Returns. https://lnkd.in/eGiNhjqQ I'm stealing from the best which, in this case, includes Clive Granger. #markets #finance #stocks #quantresearch #portfoliotheory #hedging #options

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This is the best summary / decision tree for #directindexing, I've ever seen. One use case that's missing though, is the correction for concentrated positions, e.g. in the case of stock options of people working for large corporates. Another one is faith-based investing, since most ESG funds are not sufficiently covering that topic - Taber Johnson and Reid J. Steadman can tell you more!

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Monitor: US BSL CLO New Issue Arb Trend Since 2017 The median arbitrage metric YTD at 195 bps is actually lower than in both 2022 and 2023, but this year’s new issue volume has already far exceeded the past two years’ volume on an annualized basis. Similarly, 2018-vintage deals had the lowest median arbitrage metric at 191 bps, but 2018 was a record-breaking year for new issue #CLO volume at the time. On the other hand, 2020-vintage deals had the best median arbitrage metric at 243 bps, but their new issue volume was the lowest. If you’re interested in learning more about the premium content or would like a walkthrough of the website via Zoom, please don’t hesitate to email me at info@clopremium.co.uk. https://lnkd.in/e6sUTfjw

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As a new Portfolio Manager, you'd think I am busy working hard on quant research or conducting sales calls, but no—a good chunk of my time is spent convincing people that I won’t run away with their money 🤦🏻‍♀️ Financial frauds have become so rampant that folks show extreme mistrust for even SEBI-registered portfolio managers, which is a custodian-backed structure and the safest way to let a portfolio manager manage your money. I’m sure many of us have encountered the impact of these scams. Unregistered PMSs take people's money without a proper structure or a custodian and vanish. I’ve heard so many instances of older relatives or neighbours being scammed by callers. Even I'm randomly added to dubious WhatsApp groups daily, where individuals claim to generate unrealistically high returns. Last week I received an elaborate scam call from someone pretending to be from the Ministry of Telecom, threatening to block my number, saying it’s on the dark web (!). The extent of these scams is shocking and deeply troubling. This pervasive scamming leads to massive scrutiny of genuine products like ours. We've had to involve compliance teams in client calls, engage custodians to reassure clients, and even have clients visit our bank to verify our legitimacy. Despite clear regulatory guidelines and legal paperwork, the level of distrust is understandable given how explicitly people have been scammed. At Wright PMS, we ensure the highest level of security and trust. Our PMS is custodian-backed, which means that your assets are held securely by a trusted third party, protecting your investments from fraud. We follow stringent SEBI regulations and conduct regular audits to maintain transparency and accountability. Our performance and risk management speak for themselves—Wright PMS has delivered close to 70%+ returns in just 10 months. It's high time we enhance security in financial markets. We need more robust safeguards, better regulatory enforcement, and increased investor education to prevent these scams from eroding trust in legitimate financial services. If you’re an entrepreneur or a problem solver – solving how to mitigate financial fraud is a huge opportunity to create value. We need to work together to create a safer and more transparent financial environment. Trust is built on integrity, and it's our collective responsibility to uphold it. #InvestmentScams #InvestmentSecurity #InvestmentSafety

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And after The Fed cuts rates, maybe Bank Indonesia follows suit, says who foreign inflow will start coming into Indonesian market? 😐 India would be a hard competitor to beat for Indonesia. Much bigger market caps, higher GDP, and a more stable political issue with satisfying general election when incumbent Modi confirms his winning. Not to mention more sophisticated people's mentality and tech-minded. Just saying... 🙄 #stockmarket #research #ihsg #ladyanalyst #technicalanalysis #fundamentalanalysis #macroeconomics #

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DBi seeks to find the simplest, most efficient path to replicate the pre-fee returns of #hedgefunds. Allocators often question whether it's too simple. Here's an astonishing quote from Nick Patterson, a pioneering quant at Renaissance Technologies LLC: "I think the most important thing to do on data analysis is to do the simple things right. So, here’s a kind of non-secret about what we did at Renaissance: in my opinion, our most important statistical tool was simple regression with one target and one independent variable. "It’s the simplest statistical model you can imagine. Any reasonably smart high school student could do it. Now we have some of the smartest people around, working in our hedge fund, we have string theorists we recruited from Harvard, and they’re doing simple regression. Is this stupid and pointless? Should we be hiring stupider people and paying them less? And the answer is no. "And the reason is nobody tells you what the variables [are] you should be regressing. What’s the target? Should you do a nonlinear transform before you regress? What’s the source? Should you clean your data? Do you notice when your results are obviously rubbish? And so on. "And the smarter you are the less likely you are to make a stupid mistake. And that’s why I think you often need smart people who appear to be doing something technically very easy, but actually usually not so easy." "Do the simple things right" and "don't make a stupid mistake" sums up what Mathias Mamou-Mani and I have sought to do for fifteen years. #hedgefunds #ctas #ucits #etfs

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Bull case for $PALL 1- Managed money is historically short Palladium as a percentage of open interest, per the CFTC'S commitment of traders report (below and to be updated with Monday's delayed report). Note: speculators are generally more fickle than the producers/merchants and swap dealers that are on the other side of this trade, raising the probability of a short squeeze. 2- Speculation that EVs are going to displace internal combustion engine vehicles and hybrids is being reconsidered in a big way, especially in the Americas. Tariffs don't help. 3- Discount to platinum, so potential reversal of Pt substitution in catalytic converters. 4- Price ~25% below estimated average cost of mining, unsustainable in the long run. 5- Mining production concentrated in two of the riskiest countries: Russia and South Africa. 6- Peak Fed funds, likely a cut in September. 7- Free call option on a future hydrogen economy, with Palladium playing a key role in the generation, purification, storage, and detection of H. 8- Rumored corner of the physical by China as a retaliatory measure for EV tariffs. Auction prices for physical palladium in London way above Sep futures price in NY as of Friday's close. Bear case: 1- Russia dumping Pd stocks as it struggles to finance its war with Ukraine? 2- EV battery technology improvements and acceleration of charging station build out? 3- Catalytic converter design permanently using more Platinum and less Palladium? 4- Next Fed move actually a hike? 5- Imminent global recession adversely impacting auto demand? *Battle lines are being drawn. Abbott Capital is positioned long $PALL and long Sep Palladium futures.

Earning small trading profits but incurring larger losses? We're finalizing a video with very simple actionable tweaks at trading psychology & charting oscillator level to reverse this problem immediately! Please standby for release. Have you subscribed to our YT channel https://lnkd.in/eSPbYKd yet?

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I've traded STIR for over 18 years. Couldn't help notice interesting surge in volume in SOFR Z4-Z5 calendar as spread narrows to 58bp. It is interesting as not only the market has begun to price fewer cuts in 2024, it has taken out more than an entire cut from 2025. Is the market beginning to price higher for longer? This could also imply that if the Fed cuts too soon, inflation might reaccelerate. It opens up some really interesting trades in mid curve options for me. What are your thoughts?

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The next instalment in the Cultivating Advising Success series by Melinda Roy is now live on the Plaid Analytics blog. In this post, we look at the different types of advisors and advisee types. Just as different plants require different approaches in the garden, different students need different types of advising approaches and interventions. Matching your approach and advisor roles to student needs is core to a successful advising program. From confident-independent students who rarely visit advisors, to insecure-dependent students who rely on advisors for decision-making, we explore the types of students who visit (or don't) advisors, and discuss their needs, attitudes, and expectations for advising services. Read the full post here: https://lnkd.in/gVf8FznC As advising success is key to the success of many SEM plans, it is a crucial to design a tailored approach that not only upholds institution mission and values but one that is responsive to changing student needs. Leveraging institutional data to understand your student body, and building a diverse advising team with the skills and lived experiences that reflect the student body is core to having a trusted advising program. Whether they are generalists, faculty advisors, career counselors, or peer liaisons, advisors are essential in helping students achieve personal and academic success. When advisors are empowered and informed, students will be too. If you're restructuring your advising approach, be sure to invest in your advising team to create an environment where every advisor and advisee can thrive. 🌿

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Business inventories rose by +0.3% month/month in April, taking year/year pace up to +1% 

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Leverage Catches Up with Leveraged Buyout There's a reason you don't hear anyone at a cocktail party bragging about how much of their own money they just incinerated - it's all about their home runs. But disaster strikes not infrequently. For example: Vista Equity Partners just wrote off the entire equity value of its investment in tech learning platform Pluralsight, only 3 years after taking it private for $3.5 BN. I'm sure there were many contributing factors, and who knows how much @Vista_Equity was able to first extract via a dividend recap, etc., but this is a great illustration of leverage catching up with a leveraged buyout. Read Dan Primack: https://lnkd.in/eHd7qQhr #investing #stocks #bonds #venturecapital

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Five Moat Myths by Robert Vinall of RV Capital. I share very similar thoughts and thought it was a great presentation that I highly recommend for anyone to watch. Five Moat Myths 1) Wider is better. 2) All moats are created equal. 3) Execution does not matter. 4) Management does not matter. 5) Moats always matter. Conclusion 1) A widening moat is preferable to a wide moat 2) Some moats improve with time; others decay 3) Moats are an output of a great business; NOT an input 4) Management can create, but more importantly, destroy moats 5) Moats are most valuable in static economies and least valuable in dynamic economies Video: https://lnkd.in/gn_PEC6z Slides: https://lnkd.in/ghwSngi5

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