More from Thaler and, alas Navellier

Wed, 2017/10/11 - 1:30pm | Your editor
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It turns out that Nobelist economist Richard Thaler was willing to make a prediction about the stock market outlook after all, in a Bloomberg TV interview. “We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, in a phone conversation. “I admit to not understanding it.”

The S&P 500 index has been reaching repeated records since the election last November amid steady growth in the U.S. economy and labor market, and anticipation of lower taxes, though until now Washington has not done much.

Thaler, who won his Noble for studying irrational and temptation-driven actions in markets, expressed misgivings about low volatility and continued investor optimism. “I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,” Thaler said, “Nothing seems to spook the market” and if the gains are based on tax-reform expectations, “surely investors should have lost confidence that that was going to happen.”

This is of a piece with Prof. Thaler's statement yesterday that he will spend the ~$1 mn Nobel Prize money “irrationally” rather than turning it over to one of the funds he advises.

 

A mini-Madoff was sentenced to pay a fine of $35 mn by a Boston court after charges were brought by the SEC against Howard Present of F-Squared Investments of Wellesley Mass. Present has to disgorge $35 mn for fabricating a 7-year track record for the fund sent to clients and potential clients. He claimed that its “AlphaSector” Strategy had been in use from 2001 to 2008 to switch between sector exchange-traded funds. In fact heand another man  made the results up using backtested data rather than real investments.

Louis Navellier, a fellow newsletter editor, alas, was also charged with fraud by the SEC for claiming his Viero AlphaSector ETF used AlphaSector stratgegies from F-Squared when in fact they could not be substantiated. Navellier sold his Vireo fund to F-Squared for $14 mn in mid-2013 despite knowing the results were faked.

 

More for paid subscribers follows from China to Finland, from Japan to Chile, from South Korea. There will be no blog tomorrow either because of Simchat Torah or because I have to be on call for the umpteenth time for (I hope) relinking my office and apartment telephone lines which have been out of order since Sept. 5!

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