Market Strategist Jeff Saut on Gaining Street Smarts

Market strategist Jeff Saut has released his latest weekly investment strategy piece entitled "Street Smarts."  The title sums up exactly what his piece is about as he begins by quoting Confessions of a Street Smart Manager by David Mahoney:

"Some people can have a lot of experience and still not have good judgement. Others can pull a great deal of value out of much less experience. That’s why some people have street smarts and others don’t. A person with street smarts is someone able to take strong action based on good judgement drawn from hard experience. For example, a novice trader once asked an old Wall Street pro why he had good judgement. “Well,” said the pro, “Good judgement comes from experience.” “Then where does experience come from?” asked the novice. “Experience comes from bad judgement,” was the pro’s answer. So you can say that good judgement comes from experience comes from bad judgement."

We've said before that investing is a continual education, you never stop learning.  And while you can read all the investment books out there and learn from the mistakes of others (which is highly beneficial), sometimes you just have to make a mistake yourself to truly learn from it.

Saut's weekly strategy piece "Street Smarts" is embedded below:



You can download a .pdf copy here.

Market Strategist Jeff Saut on Being Wrong and Still Making Money

Raymond James market strategist Jeff Saut is out with his latest commentary entitled, "Being Wrong and Still Making Money."  It's been a while since we checked in with Saut, so here's what he's saying these days.

He has been cautious over the past month or so and admits his stance has been 'too cautious.'  Saut then dove into the concept of being wrong and still making money.  He quotes Peter Bernstein, who wrote:

"The trick is to survive!  Performing that trick requires a strong stomach for being wrong because we are all going to be wrong more often then we expect. The future is not ours to know. But it helps to know that being wrong is inevitable and normal, not some terrible tragedy, not some awful failing in reasoning, not even bad luck in most instances. Being wrong comes with the franchise of an activity whose outcome depends on an unknown future (maybe the real trick is persuading clients of that inexorable truth)."

Saut then goes on to reference a piece that divides investors into three categories: Rabbits, Hunters, and Assassins, based on how they act in the market.  Written by Lee Freeman-Shor, it states:

"My findings suggest the odds are that an investor's great ideas will lose money. As such, before you invest a cent into an investment idea, it is imperative to have a plan of action as to what you will do if you find yourself in a losing position. When losing, the successful investors I worked with planned to become either Assassins or Hunters. Assassins sold losing investments that fell by a certain percentage or that declined by any amount and showed no signs of recovery after a certain period of time. Hunters invested a lesser amount at the outset and with a plan of buying significantly more shares if the price fell. Hunters were also unafraid to sell if it became clear that they had made a mistake. The bad investors didn't have a plan and consequently turned into Rabbits. When losing money, Rabbits neither bought more shares nor sold their holdings. Once forming an initial perception, Rabbits were achingly slow to change their opinion of a stock. Which tribe will you become a member of?"

As to where Saut is looking to put any money to work on pullbacks, he recommended Hilton (HLT), Flexion Therapeutics (FLXN), Nvidia (NVDA), Iridium (IRDM), and Texas Capital Bancshares (TCBI). 

Embedded below is Jeff Saut's latest market commentary: Being Wrong and Still Making Money



You can download a .pdf copy here.

Jeff Saut's Latest Market Commentary: Darvas Discipline

Market strategist Jeff Saut is out with his latest commentary entitled "Darvas Discipline."  He titles it so because he references Nicolas Darvas in a passage from his book, How I Made $2,000,000 in the Stock Market.

Darvas wrote,

"I knew that I had to adopt a cold, unemotional attitude towards stocks; that I must not fall in love with them when they rose and I must not get angry when they fell; that there are no such animals as good or bad stocks.  There are only rising and falling stocks - and I should hold the rising ones and sell those that fall.  I knew that to do this I had to achieve something much more difficult than anything before.  I had to bring my emotions - fear, hope and greed - under complete control ... I started to see that stocks have characters just like people.  This is not so illogical, because they faithfully reflect the character of the people who buy and sell them."

He then touches on the concept of tracking stocks with favorable technical setups but then only buying when they give a fundamental reason for doing so: improving earnings power.


Embedded below is Jeff Saut's latest market commentary: Darvas Discipline



For more, check out Saut's other recent commentary where he noted Steve Eisman thinks the US is destined for slow growth.

Market Strategist Jeff Saut's Latest Commentary: "Deja Vu"

It's been a while since we checked in on market strategist Jeff Saut of Raymond James.  His latest piece is entitled "Deja Vu."  In it, he touches on the fact that many market participants are flagging various bearish signals and expecting a big pullback.  He lays out his response given that he's been bullish since the February low this year.

Embedded below is Jeff Saut's latest market commentary, Deja Vu:



You can download a .pdf copy here.

Market Strategist Jeff Saut: "We're Trying to Stay Constructive, But Negative Evidence Mounting"

It's been a while since we checked in with market strategist Jeff Saut.  This week, his commentary is called "Go Opposite to Hysteria" referencing a quote from Jim Rogers in the excellent Market Wizards book.

Saut takes a look at the technicals given all of the volatility as of late.  He concludes:

"If you want to put a positive spin on things, the six other times the stock market declined by 10% in four days, like it did in August, every time the market rose within a year.  If you want to put a negative spin on things, there was a Dow Theory 'sell signal' last month.  We are trying to stay constructive, but the negative evidence is mounting;"

Embedded below is Jeff Saut's latest investment strategy:



You can download a .pdf copy here.

Jeff Saut's Latest Market Commentary: "Rescue Me"

It's been a while since we checked in on market strategist Jeff Saut, so embedded below is his latest commentary entitled "Rescue Me":



You can download a .pdf copy here.

Market Strategist Jeff Saut on Activity Versus Inactivity

It's been a long time since we checked in on well known market strategist Jeff Saut.  His latest piece entitled "Activity Versus Inactivity" is a look at a common dilemma for investors.

In it, Saut takes a look at human nature and writes, "Plainly there are times for investors/traders to be active.  But there are also times for them to be inactive, despite the trait of human nature to be 'active;' and, for the past few months inactivity has been the best overall strategy."

Saut then goes on to talk about some market technicals and the latest market datapoints.  They feel crude oil has bottomed and that the stock market, even if it sells off in the near-term, would be doing so "within the construct of a secular bull market that has eight to nine years left on the upside."

Embedded below is Jeff Saut's latest market commentary:



You can download a .pdf copy here.

Jeff Saut Predicts Pullback Within Secular Bull Market

It's been quite a while since we checked in on market strategist Jeff Saut's latest commentary, so we figured it's time to see what he's thinking.  This week, Saut's investment strategy piece is entitled, "Making a Market Call." In it, he predicts that the market will see the "first decent pullback of the year" in mid-July or early August.

He arrives at this prediction based on various readings and he's advising raising cash levels, comparing it to the summer of 2011 when the market dipped 18%.  But taking a step back to the bigger picture, he also believes we're still in the midst of a secular bull market that has years left to run.

Embedded below is Jeff Saut's latest investment strategy piece:



You can download a .pdf copy here.

Jeff Saut on Richard Russell's "Rich Man, Poor Man"

Market strategist Jeff Saut has published his weekly market commentary and this time around he recites the "Rich Man, Poor Man" story from Richard Russell about how making simple decisions is the path to prosperity.

Saut himself adds,

"In the world we live in, few look at risk.  Most only look at reward.  The few who do look at risk (the educated, the street savvy) make their money at the expense of the great unwashed majority who swallow the noise nonsense about getting rich quick.  Investing is a get rich slowly process.  You have to put your money at risk in the face of uncertainty.  Emotions run rampant before the uncertainty of floating, fluctuating, often violent and volatile markets."

Embedded below is Jeff Saut's weekly market commentary: "Rich Man, Poor Man!"




You can download a .pdf copy here.

For more from Saut, head to 6 themes for investing in a slow growth environment.

Strategist Jeff Saut: Primary Stock Market Trend Remains Up & A Pitch on Weyerhaeuser

Market strategist Jeff Saut is out with his weekly investment strategy commentary.  In it, he highlights various positive economic datapoints and he thinks GDP growth will accelerate in 2014 to 3%.

Saut also points out that the Fed is on the market's side with Janet Yellen set to takeover and "that implies no tapering and plenty of liquidity."

He also touches on how housing market bulls have cooled a bit due to rising interest rates.  He notes that over the past few weeks, rates have retraced a bit.


Weyerhaeuser (WY) as a Play on Housing

Saut highlights a "second derivative way" to get access to the housing theme via Weyerhaeuser (WY).  This is one of their analysts' current favorites and here's their take:

"We believe: 1) the embedded value of Weyerhaeuser’s homebuilding platform is underappreciated relative to other  public builder valuations (most notably, the 17,700 lots it controls in California); 2) the recent underperformance of  WY shares has created a buying opportunity; and 3) in the context of our REIT coverage, there are relatively few  opportunities to find similar long-term earnings/cash flow growth stories. In our view, Weyerhaeuser’s  homebuilding platform (one of the 20 largest in the country), significant wood products business, and immense  timberland portfolio position it as a compelling alternative to pure-play homebuilders in this housing recovery.  Weyerhaeuser is targeting a payout of 75% of FAD over the cycle and is well positioned to raise its dividend as the  housing recovery gains momentum. The company has already boosted its dividend by 33% since October (WY  shares currently yield ~3%)."


Embedded below is Jeff Saut's latest market commentary:




You can download a .pdf here.

And you can catch up on some of Saut's previous commentary here.

Strategist Jeff Saut's Latest Market Commentary

Market strategist Jeff Saut's latest weekly commentary is entitled "Ashes to Ashes" and that's what he thinks the budget worries turn into by this time next week.  He then focuses on investor sentiment these days.

Saut points out views from individual investors he's been seeing:

"(They) seem to be 'frozen' like deer in the headlights, believing that you need to have a feel good environment to have a secular bull market.  The reality of the matter is that when you finally get that 'feel good' environment, it tends to be pretty late in the overall scheme of things."

Saut advises caution when it comes to fixed income as that had been the 'easy buy' and rates have increased this summer.  Regarding equities, he feels that you shouldn't worry too much about the worry surrounding Q3 earnings.

Embedded below is Jeff Saut's latest commentary:




You can download a .pdf here.

Market Strategist Jeff Saut's Latest Commentary: "Character"

It's been a while since we checked in with market strategist Jeff Saut, so today we read his latest investment strategy commentary entitled "Character."

In it, Saut details the worries of the debt ceiling and potential government shutdown.  For what it's worth, he thinks it's "noise' in the intermediate term and that eventually it will get resolved.

In such a scenario, he sees the stock market shifting its attention to an improving economy and better economic numbers out of China.  He also points out that mega cap stocks have been the weakest.

Embedded below is Jeff Saut's latest market commentary:




You can download a .pdf copy here.

For an older but long-term focused piece from this strategist, head to Jeff Saut's best stock ideas for the next 3-5 years.

Market Strategist Jeff Saut: September Historically the Worst Month For Markets

It's been a while since we checked in with market strategist Jeff Saut, so below is his latest weekly commentary entitled, "Money and Savings?"  In it, he talks about the difficulty in timing the market and how he's tried to manage risk the past few months while expecting a decline.

While things haven't quite played out as he's thought recently, he still pulls some interesting data out:

"September is truly the worst month historically.  Indeed, September has seen the worst average returns for the D-J Industrials over the past 50 and 100 years."

Embedded below is Saut's latest commentary:




You can download a .pdf copy here.

We've previously posted how Saut has raised cash in anticipation of a decline in stocks.

Market Strategist Jeff Saut: Raising Cash In Anticipation of Decline in Stocks

Market strategist Jeff Saut is out with his latest investment strategy for the week entitled "The One Chip Rule."  In it, he compares the markets to playing poker, a comparison numerous others have drawn as there are various similarities.

Saut opines,

"In the stock market’s case, while the human natures of fear, hope, and greed still play a large role, I tended  to substitute card players with the personalities of stocks, the market makers, the Fed, Washington, and politicians. Using  such strategies I found that if you do your homework, and manage the risk, the odds of success in the markets are much  better than a card game. When you lose in the markets at least you get most of your money back and the government shares  in a portion of your losses via the capital gains/capital losses tax system. In a card game it tends to be basically all or nothing  with each hand."

The '1 chip rule' basically says that for every 10 chips you accumulate, you pocket 1 to pay yourself.  In investing, the corollary is to take some profits as your investments run up higher.

Saut uses this analogy because he's been raising some cash recently in anticipation of a decline in stock prices.  While he admits this strategy has been wrong in the near-term, he points to various indicators and seasonality that has caused him to be more cautious.

Embedded below is Jeff Saut's weekly market commentary:




You can download the .pdf here.

For more of the indicators that have led to Saut's cautious approach, head to his commentary from last month.

Strategist Jeff Saut Cautious, Says To Raise Cash Levels

Market strategist Jeff Saut is out with his latest commentary entitled "Rosebud" where he outlines his slightly cautious approach to the markets this month, expecting a pullback while citing impending Bernanke testimony and rhetoric about sequestration slowing the economy.

Saut also poignantly points out that,

"Reinforcing my cautionary view is a stock market axiom I learned from an old Wall Street wag in the 1970s that states, “When  they start running the ‘dogs,’ it’s time to begin looking over your shoulder.”"

He then goes on to cite that the 50 smallest stocks in the S&P 500 jumped almost 22% in the first half of the year while the 50 largest only gained 13.3%.

Saut's recommendation for the near-term is to raise cash levels.

Embedded below is Jeff Saut's weekly commentary, "Rosebud":




You can download a .pdf copy here.

If you missed his commentary last week, Saut sees a decline followed by a higher market by year-end.

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.

Market Strategist Jeff Saut on the Odds of a New Secular Bull Market

Market strategist Jeff Saut is out with his weekly commentary and in it he features some prudent commentary on being 'early' in investing and how the crowd tends to move long after the optimum time.  Saut also talked about the odds of a new secular bull market taking place:


"Last December I pegged the odds of a new secular bull market at 20%-25%.  I have increased those odds over the past six months to where I now believe those odds are at 45%-50%, yet few investors believe it.  To be sure, most participants think there has to be a 'feel good' environment for a secular bull market to exist.  The reality is that when that 'feel good' environment occurs, you are typically in the late innings of a secular bull market.  Ladies and gentlemen, the equity markets do not care about the absolutes of good and bad, but rather if things are getting better or worse; and, things are definitely getting better!"


His point about 'few investors believing it' is certainly worth considering.  Longtime readers may recall our investor psychology illustrated post that shows how bull markets are often born with dire sentiment, rally with disbelief, and then peak with euphoria. 

If Saut is correct, then one could potentially compare the 2013 market to the 'skeptic' portion of a rally.  After all, many investors have spent 2013 wondering when the major pullback will come.

Regardless, Saut's full commentary this week is worth reading and it is embedded below:




You can download a .pdf here.

For more from this strategist, head to Jeff Saut on the market buying stampede as well as his thoughts on investor sentiment.

Strategist Jeff Saut on the Stock Market Buying Stampede

Checking in with market strategist Jeff Saut we see that his latest weekly market commentary is entitled 'Buying Stampede' due to all the questions he's received lately about the market.

Saut writes, "I continue to believe the SPX is going to trade north of 1700 into the end of 2Q13 before becoming vulnerable to a more significant decline beginning in the July/August timeframe.  Obviously I have never seen a buying stampede like this one, which has lifted the senior index above a basing formation in the charts that was 13 years in the making."

He then notes that there have been four previous 'bases' that have launched secular bull markets that have lasted 12 years or longer (1906-1924, 1929-1955, 1966-1982, and then 2000-2013).

Saut cites a slidedeck of this data that says "The characteristics of the market when it breaks out of a base that exceeds 12 years in length is different. Investor behavior reflects an underlying distrust or disinterest and is characterized by underinvestment in equities.  This results in a rebound that is relentless, providing little opportunity to buy on pullbacks."  Sound familiar?


Embedded below are Saut's full analysis and comments:



You can download a .pdf copy here.


For more thoughts from this strategist, head to Jeff Saut on investor sentiment and you can also see his best stock ideas for the next 3-5 years that he outlined early this year.

Jeff Saut on Equity Investor Sentiment and Gold: Weekly Commentary

Market strategist Jeff Saut's weekly commentary focuses on his awe of the stock market rally.  He writes,

"The “buying stampede” is at a legendary 70 sessions and quite frankly I have never seen anything like  this in 42 years in this business and more than 50 years of watching the markets."

Also worth pointing out is the fact that Saut met with hundreds of individual investors last week and found that most find the stock market's rally as 'artificial' and think another crash will come because of it (equity mutual fund inflows have increased this year though).

Even more intriguing, however, is the latest sentiment survey from the American Association of Individual Investors which shows a huge drop in sentiment (from 35% bullish down to 19% bullish), even while the market hits new all-time highs.  Typically, you see the opposite (investors become bullish during peaks and bearish during troughs).

Saut also opines a bit on gold after it's seen quite a drastic fall over the past few days which you can read in his embedded below commentary:




You can download a .pdf copy here.

For more from this strategist, check out his previous commentary on how we're due for a pullback.

Bill Gross on How To Be a Better Investor: PIMCO Investment Outlook

PIMCO's Bill Gross is out with his monthly investment outlook for April.  Entitled "A Man in the Mirror," Gross examines himself as a market participant and provides wisdom by outlaying how others can learn from his mistakes.

One interesting part he raises is how all investors of this generation have benefited from a period of credit expansion.  He writes,

"But let me admit something. There is not a Bond King or a Stock King or an Investor Sovereign alive that can claim title to a throne. All of us, even the old guys like Buffett, Soros, Fuss, yeah – me too, have cut our teeth during perhaps a most advantageous period of time, the most attractive epoch, that an investor could experience."

Later, he goes on to emphasize how investors may be forced to adapt and to make a change, an important thing to keep in mind as we approach the potential of a rising interest rate environment in the future.

Embedded below is Bill Gross' April commentary:




You can download a .pdf copy here.

For more from this bond kingpin, head to Gross' previous investment outlook: rational temperance.