{"id":487857,"date":"2017-05-12T22:30:20","date_gmt":"2017-05-12T22:30:20","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=487857"},"modified":"2017-05-12T22:30:20","modified_gmt":"2017-05-12T22:30:20","slug":"the-new-financial-weapons-of-mass-destruction-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=487857","title":{"rendered":"The \u201cNew\u201d Financial Weapons of Mass Destruction"},"content":{"rendered":"
<\/a><\/div>\n

By Brian Maher<\/a><\/span> <\/p>\n

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This post The \u201cNew\u201d Financial Weapons of Mass Destruction appeared first on Daily Reckoning.<\/p>\n

Please. Blindfold your eyes.<\/p>\n

Then grab a dart and heave it in the general direction of Wall Street.<\/p>\n

If it doesn’t make you money\u2026 your dart-tossing just isn’t what it could be.<\/p>\n

Such is the stock market, 2017.<\/p>\n

Stocks trade near record highs.<\/p>\n

Every random throw of the dart seems to find bull’s-eye\u2026 as if the bull’s-eye itself was a giant magnet\u2026 attracting the humblest stock that falls within its field.<\/p>\n

But is it true? Are most stocks winners?<\/p>\n

Goldman issued a report about the stock market Wednesday. \u201cEye-opening\u201d might be one term to describe it.<\/p>\n

\u201cScary\u201d might be another.<\/p>\n

Details to follow.<\/p>\n

But first a look at the dart board\u2026<\/p>\n

The magnet’s faulty today. The Dow’s off 23 points. The S&P’s down four points of its own. But the Nasdaq’s up a nickel.<\/p>\n

Gold’s up five bucks and change\u2026 for what it’s worth.<\/p>\n

Now\u2026 if it seems that any old stock is a potential ticket to the good life, you might have another guess\u2026<\/p>\n

According to Goldman, a mere 10 stocks \u2014 10 stocks \u2014 account for almost half the S&P’s gains for the year.<\/p>\n

Forty-six percent, to be precise.<\/p>\n

This year’s bull’s-eye stocks are the so-called FAANGs \u2014 Facebook, Amazon, Apple, Netflix and Google.<\/p>\n

Rounding out the top 10 are Visa\u2026 Philip Morris\u2026 Oracle\u2026 Home Depot\u2026 and Broadcom.<\/p>\n

Most other stocks are zeroes \u2014 or worse.<\/p>\n

But the winners shine so brightly they blind.<\/p>\n

David Stockman in yesterday’s reckoning:<\/p>\n

\u201cDuring the last 70 days, the FAANGs have gained $260 billion in value, while the other 495 companies in the S&P 500 have lost an identical amount\u2026 Other than the five FAANG stocks, the market has been silently collapsing since March 1.\u201d<\/p>\n

Meanwhile, recent data from Fundstrat Global Advisors reveal that just 40 stocks out of 500 \u2014 8%, that is \u2014 account for some 85% of the S&P’s gains this year.<\/p>\n

If you’ve had a tough time reconciling your own portfolio with the constant yak about record markets\u2026 you just might have your answer.<\/p>\n

You picked the wrong darts.<\/p>\n

Earlier we suggested the word \u201cscary\u201d to describe the foregoing.<\/p>\n

But why?<\/p>\n

Just throw in your lot with the FAANGs and maybe a handful of others. Then lie back on your oars. Let the rising tide lift your boat.<\/p>\n

Ah, yes. But what happens when the tide rolls back out?<\/p>\n

If just a handful of stocks drive the market higher, they can also drive it in the other direction.<\/p>\n

Down.<\/p>\n

And fast\u2026<\/p>\n

We recently reckoned about a creature called \u201crisk parity.\u201d<\/p>\n

\u201cRisk parity,\u201d we wrote, \u201cattempts to distribute risk across several asset classes by allocating more money to lower-volatility investments and less money to higher-volatility securities.\u201d<\/p>\n

Normally that might involve a bias for bonds over stocks \u2014 bonds generally offer less risk.<\/p>\n

But stock market volatility has been so low lately, many stocks seem as sure as a three-month Treasury.<\/p>\n

The FAANGs, for example.<\/p>\n

So these risk parity funds have abandoned the tranquility of bonds for the easy waters of stocks.<\/p>\n

It’s a type of \u201cpassive investing.\u201d Passive, because it goes with the tide.<\/p>\n

But when the tide recedes\u2026 it recedes.<\/p>\n

If \u2026read more<\/a> <\/p>\n

Source:: Daily Reckoning feed<\/a><\/p>\n

The post <\/a>The \u201cNew\u201d Financial Weapons of Mass Destruction<\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Brian Maher This post The \u201cNew\u201d Financial Weapons of Mass Destruction appeared first on Daily Reckoning. Please. Blindfold your eyes. Then grab a dart and heave it in the general direction of Wall Street. If it doesn’t make you money\u2026 your dart-tossing just isn’t what it could be. Such is the stock market, 2017. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/487857"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=487857"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/487857\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=487857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=487857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=487857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}