Five Finance Blogs for Market Bears
Five Must-Read Finance Blogs
ZeroHedge is one of the most popular contrarian finance blogs online. Boasting nearly half a million twitter followers, ZH provides content with a bearish spin that acts as a warning to an impending financial meltdown. They disseminate research snippets from a variety of sources including major Wall Street banks as well as investor letters from hedge funds and other institutional investors. They also track obscure corporate SEC filings, looking for nuggets of information missed by the mainstream media.
Their angle isn’t to relay buy or sell recommendations on individual stocks. Rather, it’s the more macro inputs such auto loan default rates, volatility sentiment and credit default swaps on sovereign debt they report on. This provides readers with a deeper level of economic theory. The end result is great coverage of more esoteric products in the financial system today that get little mainstream coverage.
Interestingly, the site’s operators were kept secretive until Bloomberg unmasked the authors a couple of years ago. It turns out that it was really only like 3 guys that were keeping the whole operation running. No matter-it’s still that good.
There’s plenty of original content authored by ‘Tyler Durden’. Movie-goers will remember him as the fictional character in Fight Club, played by Brad Pitt. The content basically focuses on the inevitability that large financial institutions (ranging from major banks to Central Banks) will eventually do themselves in. They also do a nice job of following television pundits market calls and holding them accountable when they’re wrong-which is refreshing.
ZeroHedge also acts as a distribution channel for other contributors and contrarians. Common themes played out from its blog roll members are a love for Austrian School of Economics, precious metals and even some good old fashioned conspiracy theories. But for the most part, the site offers smart insight into the inner-workings of financial markets and systems.
Their insight is a necessity for anyone that owns derivatives (such as options or futures contracts) structured products or liquid alts such as risk parity, smart beta or low-volatility ETFs.
- Contra Corner
David Stockman’s Contra Corner keeps a watchful eye on political chicanery and how it can affect your financial future. While clearly right of center, (Stockman served as Ronald Reagan’s budget director) it does not spew usual party rhetoric. The site reveals fiscal ineptitude in Washington from both sides of the aisle. And Stockman’s not afraid to lambast Trump for current borrow and spend policies for wars, tax cuts and natural disasters could have catastrophic consequences for our financial system.
As you’d expect, Stockman has a vast understanding of macroeconomics. As such, he pulls no punches when speaking about inept Central Bankers and the tsunami of debt they have created, both directly and indirectly. If you are a Keynesian, you might want to steer clear of his finance blogs.
This site should be frequented by the many Baby Boomers who are increasing allocations to fixed income as they approach retirement. And it must be read by those that run fixed income books (especially United States bills and notes) as there’s plenty of ‘inside baseball’ pertaining to fiscal concerns and budgets.
But Stockman keeps an eye on equities as well, and has been pounding the table on overvaluations of equity indices (especially the Russell 2000 small caps which he reports as having an obscene trailing P/E ratio of 132). Stockman also has a harsh dislike for forward looking earnings estimates from many sell-side banks and derides their overly optimistic inputs.
Recently, Stockman has disseminated warnings from contributors regarding the dangers of risk parity funds in the wake of the short-vol debacle. In fact, they distributed a post from a contributor about the potential for the mean-reverting vol trade to blow up, right before it did. You certainly aren’t going to get that kind of heads up from mainstream news or finance blogs.
- Elliott Wave International
Headed by longtime market technician Robert Prechter, Elliott Wave International (EWI) is a unique market forecasting service that uses the power of mass investor psychology to make predictions. His behavioral analysis is a revolutionary idea and the premise is that markets move in predetermined waves which are set in motion by unconscious human emotions. His research shows that investors, as well as money managers, follow the crowd (herd) unknowingly. This information can be very prescient when the crowd is acting at an extreme.
The nice thing about this technical analysis style is that it’s completely technically driven, so it can be applied across multitude of investments ranging from stocks and bonds to gold and even bitcoin (they recently launched a cryptocurrency trading service). While most of EWI’s material is subscription-based, there is a vast amount of free information on their site, making it one of the finance blogs we read frequently.
EWI is currently about as bearish on global stocks and bonds as you’ll find. They have called the current market hysteria in stocks and bonds the biggest of them all and should dwarf that of 1929. In fact, he Prechter has made a bold call on a bond bubble where high yield bonds, a.k.a. ‘junk bonds’ are going to zero. That should make many insurance companies (and their policy holders) rather uneasy.
- Sovereign Man
The Sovereign Man finance blog is founded by Simon Black, an entrepreneur and philanthropist without borders. It utilizes a team consisting of Wall Street veterans (from Goldman Sachs and Lehman Brothers) and wealth managers based across the globe who have decided to join Black. This unique finance blog is for those that are serious about not only understanding why the global financial system is in dire straits, but what to specifically do about it to protect yourself (and your assets).
The site has a vast amount of free resources for visitors including a popular podcast and ‘Plan B’ financial survival guide. Sovereign Man has over 100,000 subscribers who utilize the site’s three main services- grow wealth, lower taxes and protect assets (while increasing freedom).
Growing wealth offers unconventional and international investment services outside of traditional stocks and bonds. Tax strategies include finding legal wealth building solutions in more obscure retirement structures such as self-directed IRAs where you can invest in a wide variety of assets such as gold, farmland, inverse ETFs, a private business or crypto currencies such as bitcoin (and hopefully a bitcoin ETF). Finally, Black’s asset protection programs include a variety of strategies ranging from securing a second passport to offshore banking and storing gold overseas (safe from confiscation).
5- Gloom, Boom and Doom
In accordance with the title, Gloom, Boom, Doom is a contrarian investment newsletter published by Swiss Investment advisor Marc Faber. You should read it and heed its warnings. He is almost uniformly bearish about equity markets, globally. Despite being one of a handful of people to predict the Crash of 1987 (and on record in doing so) he is often dismissed by television hosts as almost radical. As such, his appearances are scarcer but his website and finance blogs show replays of television and radio interviews. There are snippets of old research reports as well.
Mr. Faber is often labeled a perma-bear for his perpetual bearish/short recommendations. But a check of his record indicates otherwise. There are plenty of instances with extremely bullish calls by Faber, samples of past issues can be found on his Gloom, Boom and Doom website. For example, Faber gained notoriety in 1984 for a bullish call on bonds, which was a very controversial call at the time (U.S. Treasury bonds had bottomed a couple years earlier and were making a retest of their lows).
Faber had equally prescient bullish calls for the Philippines, Singapore and Thailand and China (Shanghai Composite) in the early 1990s. The Gloom, Boom and Doom report is a modest $300 per year and well worth every penny in our opinion. It’s a must-read if you invest in commodities, FX or emerging markets (especially Asia where he has lived for over 40 years).