Monday, January 30, 2017

Prepare For High Beta Implosion. Like Last Time...

What we've learned from history is that sheeple don't learn from history. The same zombies can get conned by the same psychopaths over and over again. Who knew?

The past year's Anti-Globalization rally was led by the junkiest cyclical stocks. These are stocks that are highly leveraged to economic reflation, which unfortunately happens to be a late cycle fantasy. You know, like last time...

The high beta ETF relative to S&P, one year performance:

I think we all see where I'm going with this...

Let's take a look at the top holdings:

These are the stocks leading the past year's rally:

The top holding is Chesapeake Energy the oil and gas exploration company whose CEO died in a 'mysterious' car crash one year ago, a day after being indicted for bid rigging:

Williams Companies
Natural gas pipelines

Oil services

Also in the top 10
Western Digital
Hard drives

Here are the top financials

Lincoln National

Schwab. Of course...

A bit further down...


Last, but not least Northern Trust.

Remember 2008, and the fake reflation then too? I do...