Scary 1929 market chart gains traction
Opinion: If market follows the same script, trouble lies directly ahead
Watchlist Relevance
http://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11?link=MW_story_popular
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) —
There are eerie parallels between the
stock market’s recent behavior and how it behaved right before the 1929
crash.
That, at least, is the conclusion reached by a frightening chart that
has been making the rounds on Wall Street. The chart superimposes the
market’s recent performance on top of a plot of its gyrations in 1928
and 1929.
The picture isn’t pretty. And it’s not as easy as you might think to
wriggle out from underneath the bearish significance of this chart.
I should know, because I quoted a number of this chart’s skeptics
in a column I wrote in early December. Yet the market over the past two
months has continued to more or less closely follow the 1928-29 pattern
outlined in that two-months-ago chart. If this correlation continues,
the market faces a particularly rough period later this month and in
early March. (See chart, courtesy of Tom McClellan of the McClellan
Market Report; he in turn gives credit to Tom DeMark, a noted technical
analyst who is the founder and CEO of DeMark Analytics.)
How to tangle-proof your earbud cables
Are your earbuds always knotting and kinking? Try winding them using this super-geeky cord wrapping technique.
One of the biggest objections I heard two months ago was that the chart
was a shameless exercise in after-the-fact retrofitting of the recent
data to some past price pattern. But that objection has lost much of its
force. The chart was first publicized in late November of last year,
and the correlation since then certainly appears to be just as close as
it was before.
To be sure, as McClellan acknowledged: “Every pattern analog I have ever
studied breaks correlation eventually, and often at the point when I am
most counting on it to continue working. So there is no guarantee that
the market has to continue following through with every step of the 1929
pattern. But between now and May 2014, there is plenty of reason for
caution.”
Tom Demark added in interview that he first drew parallels with the
1928-29 period well before last November. “Originally, I drew it for
entertainment purposes only,” he said—but no longer: “Now it’s evolved
into something more serious.”
Another objection I heard two months ago was that there are entirely
different scales on the left and right axes of the chart. The scale on
the right, corresponding to the Dow’s
DJIA
+0.40%
movement in 1928 and 1929, extends from below 200 to more than 400—an
increase of more than 100%. The left axis, in contrast, represents a
percentage increase of less than 50%.
But there’s less to this objection than you might think. You can still
have a high correlation coefficient between two data series even when
their gyrations are of different magnitudes.
However, what is important, McClellan said, is that the time scales of
the two data series need to be the same. And, he stressed, there has
been no stretching of the time dimension to make them fit.
One of the market gurus responsible for widely publicizing this chart is
hedge-fund manager Doug Kass, of Seabreeze Partners and CNBC fame. In
an email earlier this week, Kass wrote of the parallels with 1928-29:
“While investment history doesn’t necessarily repeat itself, it does
rhyme.” And, based on a number of indicators rather than just this chart
drawing the 1928-29 parallel, he believes that “the correction might
have just started,” he said.
DeMark is even more outspokenly bearish. If the S&P 500
SPX
+0.58%
decisively breaks the 1,762 level, he told me, then a major bear market will have only just begun.
You may still be inclined to dismiss this. But many more were laughing
last November when this scary chart began circulating. Not as many are
laughing now.
Why mutual funds beat Obama’s myRA plan
new
By Chuck Jaffe, MarketWatch
There are a few problems with President Obama’s new retirement savings
program, the myRA, but the biggest one may be that Americans have been
able for years to get nearly everything it offers, but haven’t been
doing it.
All they needed to achieve most of Obama’s goals without his assistance was a mutual fund with a low minimum initial investment.
It isn’t a perfect comparison—there are definitely places where the myRA
will have advantages, and others where funds could have an edge—but the
bigger point is that you don’t necessarily need to put more
screwdrivers in the toolbox when investors haven’t been using what’s in
there anyway.
To see how fund investors can achieve the results of the myRA without
actually ever enrolling, let’s look at the president’s new initiative.
The myRA is a savings vehicle designed to serve people whose employers
don’t provide access to a retirement plan. That’s about half of all
workers, mostly the ones who work for small employers that can’t afford
to put a program in place.
Obama's MyRA proposal: Mind the 'buts'
Charles Jaffe look at the details behind President Obama's "MyRA" savings program and advises investors to read the fine print and mind the "buts."
The myRAs will be backed by a security that looks and feels like a
savings bond, is backed by the government and with the same
variable-interest-rate return offered by the G Fund, the Government
Securities Investment Fund in the federal employees’ Thrift Savings
Plan. Savers—who will be able to open accounts for as little as $25 and
make additional contributions in amounts as small as $5—would not only
be guaranteed that the value of their account would never go down, but
that there would pay no fees on the accounts.
The myRA uses after-tax dollars, like a Roth IRA (meaning withdrawals
under most circumstances will not be taxed). And while it is funded by
paycheck deductions, savers will be able to keep their accounts when
they change jobs.
Workers who have access to a qualified retirement plan won’t be tempted
much by the myRA, and employers who do not offer a plan will not be
required to sign up for the new initiative.
There also are plenty of drawbacks to the myRA plan, most notably the
required investment in the G-Fund—woefully conservative for a young
worker with decades before retirement—to the $15,000 limit (after which,
the money is rolled into a Roth IRA). (To see my detailed analysis on
the plan and its flaws, see The trouble with Obama’s myRA plan.)
Now let’s look at simply using mutual funds to do the job.
For starters, there is the option to simply open a Roth IRA instead of
the myRA. It’s a wash on after-tax money and tax treatment (especially
because the myRA converts to a Roth when it gets big enough).
While the myRA has an edge because there are no fees, the Roth IRA has a
major advantage in flexibility, and the ability to choose investments,
to be more aggressive with the long time horizon necessary for
retirement savings.
An investor who doesn’t want to actively manage the Roth portfolio can
simply go for a target-date fund—a fund that grows more conservative as
the investor nears and enters retirement—which is still a more
appropriate choice than the low-yielding G-fund.
The additional earning power and flexibility is a major consideration,
and could even make simply holding a low-minimum fund in a taxable
account a viable alternative.
Fund companies have moved away from offering low minimums in recent
years, not wanting to service tiny accounts on which there was little or
no money to be made. In general, an investor who wanted to find a
low-minimum fund had to settle for higher costs; that barrier to
entry—high minimums or high costs—is really what the myRA is trying to
solve.
That, and the idea that having it flow through employers means money can be set aside before it goes home and is spent.
But plenty of funds offer reduced minimums for investors who agree to
make monthly deposits of $50 or $100. And other fund firms have reduced
minimums on IRA accounts; likewise, some brokerage firms have no minimum
for opening an IRA or waive the requirement for monthly automatic
deposits, which allows an investor to use ETFs, which helps to minimize
any cost edge the myRA might have.
Ultimately, the story is that minimum investment requirements should not
be a factor keeping anyone from saving. You may have to make some calls
to find who offers deals or waives fees—and you might have to settle
for a fund company that’s not the darling of the media—but you’re not
locked out of the fund world just because you don’t have a big wad of
cash ready to invest.
People choking on debt and expenses and unable to save won’t be
attracted to the myRA any more than they have been to the Roth IRA. You
can’t save a drowning man by throwing him a cherry LifeSaver, and the
myRA is just a different flavor to some under-used strategies already
available. Taking advantage of it will be more a matter of taste than
necessity.
More from MarketWatch:
Feb. 13, 2014, 8:03 a.m. EST
http://www.marketwatch.com/story/m2i-development-corporation-unique-donation-to-festival-hall-2013-02-13?reflink=MW_news_stmp
Athabasca Nuclear Announces Senior Management Change
CALGARY, ALBERTA, Feb 13, 2014 (Marketwired via COMTEX) --
Athabasca Nuclear Corp.
CA:ASC
-4.76%
("Athabasca Nuclear" or
"Corporation") is pleased to report that it has appointed Mr. Charles
Downie, P.Geo. as Senior Technical Advisor to the Corporation. In
conjunction with this consulting position, Mr. Downie has
relinquished his executive role with the company while continuing to
serve on the Board of Directors of Athabasca Nuclear.
The Corporation has appointed Mr. Ryan Kalt, Chairman of Athabasca
Nuclear, to act as the Chief Executive Officer (Interim) until the
Corporation's next annual meeting or until a permanent officer is
appointed.
Mr. Kalt became a Director of Athabasca Nuclear in early 2012 and was
instrument to the Corporation in obtaining its sector-leading mineral
tenure position in the Western Athabasca Basin during 2013. Mr. Kalt
is the largest shareholder of the Corporation holding 9,691,567
common shares of Athabasca Nuclear representing approximately 21.25%
of its issued equity. He holds a Bachelor of Commerce (Honours) from
Queen's University, a Masters of Business Administration from the
University of Western Ontario, a Bachelor of Laws from the University
of Western Ontario and a Masters of Law (Natural Resources, Energy
and Environmental Law) from the University of Calgary. He
concurrently serves as the Chief Executive Officer of Gold Royalties
Corporation, a publicly-traded gold royalty company. Mr. Kalt is a
Barrister & Solicitor and an active member of the Law Society of
Alberta.
"Athabasca Nuclear is at an important stage of its growth and I look
forward to furthering the Corporation's strategy in the best
interests of fellow shareholders. I would also like to thank Mr.
Downie for his valued contributions to-date. I am particularly
excited to have him consult for the Corporation as Senior Technical
Advisor in a move that will enable his time to be reserved for and
concentrated on geological aspects of our business," stated Ryan
Kalt, Chairman and Chief Executive Officer (Interim) of the
Corporation.
Shareholder Update Regarding Website
Athabasca Nuclear is also pleased to report that it has launched a
new company website. The new website features additional content that
will be helpful for shareholders to understand and monitor their
investment in Athabasca Nuclear. It may be accessed by visiting
www.AthabascaNuclear.com
.
About Athabasca Nuclear Corporation
Athabasca Nuclear Corporation
CA:ASC
-4.76%
is a junior uranium
exploration company focused on the exploration and advancement of its
significant uranium portfolio in Saskatchewan including the Preston
Lake, Patterson Lake East, Botham Lake, Parry Lake, Martin River,
Karras River and Spring uranium projects. For more information on
each of these projects, please visit www.AthabascaNuclear.com
.
Athabasca Nuclear is the Operator of the Western Athabasca Syndicate,
a group exploration effort of a 287,130 hectare (709,513 acre)
package of uranium properties which is the largest land position
along the highly prospective margin of the Western Athabasca Basin
controlled by a single group (the "Preston Lake Project"). Under the
terms of the agreement, each of the member companies have an option
to earn 25% of the five uranium properties comprising the Western
Athabasca Syndicate Partnership by making a series of cash payments,
share payments and incurring their pro-rata amount of the total
$6,000,000 in exploration expenditures over the two-year earn-in term
of the agreement. The properties were acquired for their proximity to
the Patterson Lake South discovery and interpreted favorable geology
for the occurrence of Patterson Lake South-style uranium
mineralization. The bulk of the syndicate land package is bisected by
all-weather Highway 955 which runs north through the Patterson Lake
South discovery to the former Cluff Lake uranium mine.
Signed,
Ryan Kalt, Chief Executive Officer (Interim)
Forward-Looking Statements
This news release may contain forward-looking statements.
Forward-looking statements address future events and conditions and
therefore, involve inherent risks and uncertainties. Actual results
may differ materially from those currently expected or forecast in
such statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
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