Tuesday, July 2, 2013

Strategist Jeff Saut Sees Decline This Month But Higher Market By Year-End

This week market strategist Jeff Saut has penned his latest commentary on how many investors are "wired backwards" and love to buy when the market has headed higher and often dump stocks when the market has declined and offered compelling entry points.

Saut writes,

"The reality is that when you have a 'fell good' environment, the game is usually in the late innings.  As often stated, 'the equity markets do not care about the absolutes of good or bad, but rather are things getting better or worse.  An, things are definitely getting better.  However, in my speaking tour last week most investors don't believe it.  Nor do they believe the stock market has been rising because things are getting better.  Indeed, many of the folks I talked to believe the only thing buoying the stock market has been the Federal Reserve."

Saut actually thinks that the market could see its first meaningful decline of the year this month.  At the same time, he feels the S&P 500 will pass the high from late May by year-end.

Embedded below is Saut's weekly commentary:

You can download a .pdf copy here.

For more from this strategist, head to Saut on characteristics of market breakouts from big bases as well as Saut on the odds of a new secular bull market.

Third Point Offshore June Exposure Report

Dan Loeb's hedge fund Third Point Offshore returned -1.8% in June and is up 12.6% year-to-date according to their June performance report.

Exposure Levels

Third Point was 62.2% long and -14.7% short equities during the month, leaving them with 47.5% net long equity exposure.  Compared to May, they reduced gross exposure, but their net exposure remains the same.

In credit, Third Point is 37.8% long, -5.8% short, leaving them 32% net long.  This is largely the same as the month prior.

Geographically, they're net long the Americas by 61%, EMEA at 8% net long, and Asia at 14% net long.  The only changes here compared to May are a 1% increase in America exposure and a 1% decrease in Asia exposure.

No Longer Reporting Top Holdings

The big takeaway here is that Third Point is no longer disclosing its top 10 holdings and top winners/losers each month.  They used to report this information in their Offshore report, but are no longer doing so.

For the most recent info we have seen, head to Third Point's recent portfolio activity here and you can also check out Dan Loeb's latest letter to Sony.

George Soros on Why We Need to Rethink Economics (Video)

Today we're posting a short interview with legendary investor George Soros.  He's also the co-founder of the Institute for New Economic Thinking and he tackles the question of what's wrong with economics and what can we do to change it?

Embedded below is the video of George Soros on why we need to rethink economics:

While Soros is not involved in the day-to-day affairs, we've posted some of the recent portfolio activity from his family office, Soros Fund Management.