Angeles Advisors | Blog

  • Blog posts are written by Angeles' CIO Michael Rosen

    Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, and investment consultant.

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Inside the Triangle

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Complexity makes investing so challenging. Unlike the pure sciences, there are no hard truths in investing, no discoverable axioms that determine outcomes with 100% confidence. At best, we can speak in probabilities, but even these probabilities come with large standard errors. Investing demands humility, even from the best of us. This complexity comes from the infinite number of variables that affect investments. These variables are not just economic and financial, but also political, social and emotional. Investing cannot be reduced to a formula or an algorithm, however many Greek letters they may contain. It’s not just the sheer number of Read More


Still in Neutral

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The first quarter began with a bang and ended with a whimper. At least, that’s the message from the VIX (volatility index—see below). Bouncing around an elevated level of around 28 for much of January and February, the VIX fell 50% to 14 by the end of March. At a high level, we have maintained a pretty neutral stance in our portfolios. I didn’t think the sell-off in the beginning of the year was the beginning of a new bear market, so we held our ground. The March rally brought global equities all the way back to flat for the Read More


Laboring

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In some respects, this is a golden age for labor. The unemployment rate has dropped to 4.9% from a high of 10% in October 2009. It’s not quite as low as the 3.8% in early 2000, or the post-war low of 2.5% in 1953, but it’s pretty close to full employment. The broadest measure of unemployment (U-6, which includes discouraged as well as part-time workers who would like full-time jobs) is somewhat elevated, but has fallen sharply to 9.7%, from a high of 17.1%. 143 million Americans are employed, the most ever. The average wage is over $25/hour, also the Read More


In A Hole

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Two months ago, I offered some hope that drop we saw on the first day of 2016 was a good omen for the rest of the month and year (http://blog.angelesadvisors.com/2016/01/apres-moi-le-deluge/).  I noted that, of the 14 opening day declines since 1928, only 3 (1957, 1978, 2008) portended weak first months. And while 1957 and 2008 were down years for US equities, 1978 was positive. So there was hope (statistically). Forget it. There are lies, damn lies, and statistics (as Mark Twain wrote), and this statistic certainly lied. US stocks lost 5% in January, with another fractional loss in February, making this Read More


Digging Out

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The eastern United States was buried in snowstorm Jonas this weekend, from 42 inches (more than a meter for our non-US friends) in West Virginia to (a mere) 15 inches on Cape Cod. Snowfall records going back more than a century were toppled from Baltimore to New York. Sustained winds in excess of 70 mph added to the mess. Below is the view from my window this afternoon (70 and sunny here in Santa Monica). Now, if these two photos cause some jealousy, I’m fine with that. But my main point is that looking up into a snow bank does Read More


Après moi le déluge

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In more ways than one…. We greeted the new year with an actual deluge, at least here in California, as the long-promised El Niño swooped in with force. Mudslides and traffic accidents are the prices we will pay to replenish (but only partly) our water reserves. We were also greeted by a deluge in the markets, kicked off by Shanghai’s 7% decline on the first trading day of 2016 as investors there spent the holidays musing over the state of the Chinese economy and concluded it is not good. The ripple traveled around the globe, although dissipating with distance, as Read More


A Year-End Thought

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This week, my college basketball team visited southern California, and I was lucky enough to spend some time with them over the past few days. I found myself re-connecting to my own seminal experience 35 years ago, when I was part of that team. The intense camaraderie of that time established lifetime relationships that are among the most treasured I have. The current crop of players cannot yet fully appreciate how meaningful this is. In time, they will. Sports is, by definition, competitive, and we keep track of our wins and losses. I’m certain that my teams won more games than we lost, but I really Read More


Path to Progress

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Zimbabwe is a country of 14 million people. I’ve never been there, and I can’t recall if I’ve ever met anyone from there, but I’m sure that the vast majority of Zimbabweans are very pleasant people. I’ll also stipulate that the vast majority are hard-working, although that may be difficult to prove. Of the 14 million people in the country, just 700,000 are considered officially employed. I’m not sure what the other 13,300,000 people are doing every day, but this astonishing fact highlights for me the depth of the challenge for so many countries. Perhaps few are as abject failures as Zimbabwe, but Read More


O Pais do Futuro

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Charles de Gaulle (photo below)—imperious, disdainful, utterly French (and venerated for it in France)—noted 50 years ago that “Brazil was the country of the future.” With more than 200 million people and encompassing nearly 3.3 million square miles (about the size of the United States), Brazil is the fifth largest country in the world by population and area, and the 9th largest economy. It would seem that the future for Brazil has arrived. Unfortunately, it is more like back to the future. Brazil is in the midst of a classic balance of payments problem. It’s growth in the past decade had been Read More


Under My Thumb

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As Mick Jagger sang (screeched?) 50 years ago. The song was about turning the tables on a domineering woman (The girl who once had me down). A bit sexist, to be sure, but the song came to mind when looking at this week’s government bond auctions around the world (isn’t my life fascinating?). Our clients have been complaining about the low yields they are earning (as if I controlled that), and my response has been: count your blessings. You can lend the US government money for a year and earn half of a percent (50 cents per $100), or extend Read More