Finance Trends Letter

Greetings, friends and readers from across the globe! The New Year is well underway and with it, a pronounced sell-off in global share markets.  So what can we do to protect our mental capital and our financial capital in fast declining markets like these? Let's take a quick look around the world's markets and then I'll share some thoughts on the importance of playing defense in this environment. We began 2016 with one of the worst starts on record for the US stock market. The S&P 500's market valuation plunged by over $1 trillion , erasing the combined equivalent value of tech giants Google ( GOOGL ), Facebook ( FB ), Intel ( INTC ), Netflix ( NFLX ), and Yahoo ( YHOO ). Meanwhile, the Financial Times reported that $2.3 trillion in value had been "sliced from companies across the globe" in the first trading week of the year. The damage was widespread: "...An analysis of more than 6,000 global stocks by the Financial Times showed more ...

If you're an investor or market observer you've probably heard of Ray Dalio , founder of Bridgewater Associates. With $169 billion is assets under management, Bridgewater is the world's largest hedge fund firm.  So what can those of us with considerably less money learn from Mr. Dalio? Well, we've shared some lessons from this Hedge Fund Market Wizard with you in the past. Now, let's hear from Ray Dalio in this Bloomberg Markets panel discussion with that firm's hugely successful founder, Michael Bloomberg. How Ray Dalio runs his mega-hedge fund, Bridgewater Associates, Bloomberg video . (Hat tip: Exploring Markets ). Highlights and key quotes from Ray Dalio and Michael Bloomberg's talk: "We're just living out what we're like. For me, Bridgewater, in a nutshell, is meaningful work and meaningful relationships through radical truth and radical transparency. It means we can talk about anything, including mistakes or weaknesses, so ...

Global stock market returns for 2015 (yearly gains) via Trading Economics .  China's Shanghai Composite index leads (+48%) the major indices on a yearly basis, despite the sharp plunge from June's highs above 5,000. Brazil's Bovespa (-6%) lags, the worst performer of the major indices. You can find the full global list, covering Asia, Africa, Europe, and the Americas, at Trading Economics (link above). Here's a quick rundown of the best performing global markets for 2015. 1. China's Shanghai Composite up 48% for the year. The SSEC and new A-Share market ETF, ASHR had a huge run from late 2014 into mid-2015.  2. Russia Stock Market MICEX is up 26% on a 1-year basis. This ruble-denominated index is moving in on its all-time highs, while the dollar-denominated RTS index sits near 5-year lows. 3. Iceland's SE ICEX is up 51% over the past year. The Icelandic market has been steadily gaining ground the last 5 years after falling off a cliff in the...

Global macro investor, Jim Leitner of Falcon Management was interviewed for Steven Drobny's book, Inside the House of Money . I've included one of my favorite quotes, on the importance of following up on investing ideas, below. "Learn to love to listen to people and when you hear something interesting, follow up on it. Don't just think, "Well that's an interesting idea" only to find out a year later that the company you could've bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda."  This is an especially relevant quote, as I've struggled with regrets over missed opportunities after I failed to pull the trigger on some of my best investing ideas ( click through for more on this trading phenomenon ).  During the course of this bull market, I've also made errors of omission when it came to following up on unique investing and trading ideas gleaned from other smart traders. Maybe you've faced the ...

There's a stack of books on a corner of my desk and it's piled 10 high. They are all, in some way, related to trading or professional money management and investing.  These are books you may have heard me mention on Twitter . Some I've read and re-read. Some are newly acquired and I may have only had a chance to flip through or read to the halfway mark. We'll focus more on those I've read, but I want to give you the heads up on some of the newer (to me) titles as well. I think they all contain some useful insights that will help you to become a more focused and informed trader (or investor). Quick disclosure note: all the books I write about on this site are either purchased by me or have been given to me, either as review copies (free) from authors and publishers or as gifts from friends.  Now on to the reading list, which I hope will help you fill out your list of must-read trading books. 1. Inside the House of Money by Steven Drobny is a book I've me...

In our first installment of "Lessons from Hedge Fund Market Wizards", we examine the lessons offered in Jack Schwager's interview with noted global macro trader and hedge fund manager, Colm O'Shea of COMAC Capital.  Last week we brought you a brief overview of Hedge Fund Market Wizards , including several interviews with author Jack Schwager sharing trading insights found within this new Market Wizards volume.  We'll expand on those ideas throughout this series by zeroing in on our favorite interviews and highlighting some key lessons and quotes. Of course, our notes are just a sample of what readers will find in these interview chapters - we don't want to give away the store!   Today, we'll look closely at some key insights offered in the book's opening chapter. Here are our notes on Schwager's interview with Colm O'Shea .  1) . Colm O'Shea began his career as a young economic forecaster. He was kept behind closed doors by hi...