Weekend Reading: Yield Curve Says No Recession, Private Equity, Investing Myths

Weekend Reading Yield Curve Says No Recession, Private Equity, Investing MythsWe ended the week, and the month, on a positive note yesterday with a significant rush into the markets by market participants. Clearly, deals were abundant and buyers stepped up. That doesn’t mean we are out of the woods by any means, as many challenges remain for the economy. However, as Scott Grannis writes at his Calafia Beach Pundit blog, a recession doesn’t seem to be on the near-term horizon:

Currently, the yield curve is saying that the market expects to see modest economic growth of 1 – 2% for the foreseeable future, with modest inflation as well, in the range of 1.3 – 1.6% per year over the next five to ten years.

Instead of a recession, this recent volatility appears to be more of a re-calibration of expectations. And that could continue for a few months as new earnings information is digested and prices reset.

In the meantime, we’ve rounded-up a collection of reading for you below.

Enjoy the weekend.

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  • Consultants vs. Smart Beta (Chief Investment Officer) – “Lack of a proven track record, however, can hamper investors’ understanding of smart beta products.”
  • Hedge Fund Winner Andrew Sandler (Barron’s ♦) – “Sandler says volatility will continue through much of 2016. With margins high and little pricing power, companies will find it tough to sustain profit growth.”
  • The Great Myths of Investing (Above The Market) – “There are lots of myths at work in our lives, of course, falsehoods that are often believed and which are used to further a favored narrative.”
  • The Idiot’s Guide to Portfolio Insurance (Chief Investment Officer) – “Portfolio insurance has many meanings, but at the highest level, it is a risk-mitigating strategy that protects primarily equity-centric portfolios in the event of a negative environment…”
  • The low tricks of high finance (The Spectator) – ‘Not nearly enough has been done — the regulatory response has been totally inadequate,’ he [Michael Lewis] says. ‘The big banks have blocked serious reforms, meddling in the process so incentives haven’t changed enough to attack the heart of the problem — which is why it could happen again.’
  • Economics in the Age of Abundance (Project Syndicate) – “Instead of working to protect natural liberty where possible, and building institutions to approximate its effects elsewhere, the central challenge will be to help people protect themselves from manipulation.”

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