As Treasury is looking to refinance significant portion of it’s short term treasuries, investors demand will remain a question. It was mentioned multiple times over last tow years that China significantly reduced their treasury holdings. More recently we seen Japan which had largerest drop in US treasury holdings since 2022. There is also popularization of treasury futures to gain duration exposure through easier execution and more flexible accedd to leverage. This causes flattening of the cash Treasurties demand amongst fixed income funds which we see post 2020. This reduced bond managers demand for cash bonds, increase the risk of disorderly…

Investors entered the past year optimistic that micro-cap stocks would experience a significant rally, driven by expectations of economic resilience, supportive monetary policy shifts to monetary easing, and attractive valuations. However, the much-anticipated micro-cap resurgence failed to materialize, leaving investors puzzled. U.S. small-cap stocks have declined just over 6% since the March rally, remaining roughly flat over the past year. Despite rising more than 20% from their 2022-2023 lows. Several key reasons underpin this underperformance: Over the past two decades, the Russell 2000 has steadily lost its performance edge over the S&P 500, shifting from being a historically reliable outperformer…

There is the interesting return of a debate about share buybacks, as they have reached new all-time records, amounting to USD 1 trillion in 2024 and contributed to the US budget USD 7.4 billion through taxes on buybacks introduced in 2023. That’s roughly 2% of the entire US market capitalization. Last year’s buybacks where lead by Mag7, followed by large banks. Apple lead the pack with over USD 100 billion of stock buybacks. Debate is that many board of direcors do not adjust the EPS targets for the buy back policy. The EPS which is the main driver of the…

REITs (Real Estate Investment Trusts) offer investors an attractive combination of income, diversification, and potential capital appreciation. As of the end of 2024 and the start of 2025, many REITs are trading at multiples significantly lower than historical averages. Valuations approached very attractive levels, though the picture varies across sectors due to the unique nature of their underlying assets, tenant profiles, lease structures, and sensitivity to economic trends. Each sector’s valuation reflects its unique balance of risk and reward. For example, sectors like industrial and speciality REITs may offer attractive valuations due to strong growth prospects and stable cash flows.…

Investors often go through period of hightened risk aversion and focus too much on avoid losses while ignoring the opportunties. Ther are many reason that can motivate investor to stay out of the market, including: Whichever reason overly risk averse investor have, the belive is that ‘market correction is coming’ and by pulling out of the market he or she can avoid losses. One of the greatest investors when asked if he positioning portoflio for expected recession said: “Far more money has been lost by investors in preparing for corrections, or trying to anticipate corrections, than has been lost in…

Inflation is cooling, due to restrictive monetary policy that is starting to impact the aggregated demand. Main tool used by the central bank to reduce aggregated demand is interest rates increases. Higher rates are helping to reduce consumption through making savings relatively more appealing, and helping to reduce business investments and export through increase in financing costs. Furthermore two factors are negatively impacting employment, which further reduces aggregate consumer spending and reduce price pressures. AD = C + I + G + ( X – M ) where: AD = aggregate demandC = consumptionI = investmentG = government spendingX =…