FlowPoint Partners Blog
Welcome to FlowPoint’s blog page. This is our opportunity to comment on a range of financial and general investing topics including market activity, interesting trends or data points. This is also where we will challenge commonly held investing shibboleths with hard data – myth-busting as we call it. We hope you enjoy it and we welcome your feedback.
“The whole purpose in life for forward looking markets is to get out of synch with backward looking fundamentals at turning points.” – Don Luskin.
On GameStop, Short Selling and Markets
With our financial markets riveted lately by the action in GameStop (GME), attention has been turned to evil short sellers and getting shorty, which is natural. The action in GME was made more compelling by the breathless reporting in the media that it was so heavily shorted, with more than 100% of its float short, as if that were an issue (it wasn’t and it isn’t).

CHUCK TRAFTON, EDLY ISA
Every now and again, I come across someone I want to interview but they aren’t quite the right fit for MiB. Either the firm is too new or the assets too small or some other issue comes up.
That was the case with Chuck Trafton, a fund manager for FlowPoint Capital near Boston who I met years ago through John Roque. Trafton has been actively involved in Income Share Agreements (ISAs) through Purdue University, and now runs Edly, a marketplace for ISAs.
Bubblemania is Coming to a Sector Near You…
Executive Summary: Market participants have bemoaned stocks as levitating in a “bubble” for three years, though we’re now seeing evidence of an equity mania in selected areasAlarming parallels to the 1998-2000 timeframe, especially in the electric vehicle space, which...
WHEN CRAZY DOESN’T LOOK SO CRAZY: MARKETS AT THE MIDPOINT OF 2020
People still think this is a frothy market. It is frothy – but in isolated pockets, which is an important distinction, and we’ll get to those examples in a moment. But let’s not forget where we once were. This is the 20th anniversary year of the Pets.com...
1942
Comparisons of 2020 to prior times in U.S. history are rightfully making the rounds. Market participants are always looking for analogs. Niall Ferguson’s piece today has an interesting compare to 1968 here. And today’s WSJ has a terrific piece on a compare to the...
BLOOD IN THE STREETS? – PASSIVE INCOME FUNDS ARE THE TOURNIQUET
This Tweet by Bill Fleckenstein is worthy of comment because Mr. Fleckenstein is thoughtful and successful and he has earned our attention. The sentiment he expresses here is obviously not new and not just his. Indeed, our Twitter feed is swamped by almost...
LARGE VS SMALL CAP DIVERGENCES
For those of us that run asset allocation strategies, being in the right place at the right time is, obviously, everything. Indeed, a foundation of risk parity strategies is that asset class performance stays within historical bands. Divergences from historical...
LOONEY TOONS STOCK MARKET
A trusted friend noted to us the other day the market is acting like the economy ran straight into a brick wall with no skid marks. His point, while funny, is well taken. Something is amiss as the data is in serious conflict. The economic backdrop is still quite...
HIGH QUALITY GROWTH ON SALE
In the recent October swoon, small cap as a sector sold off more than mid and large-cap. The Russell 2000 Growth index peaked on August 31st and for the months of September and October was down 14.7%. Naturally, the question on everyone’s mind is:...
ELECTIONS, POLICY, TRADE, AND MARKETS
Now that mid-term elections are behind us, economic and investment decision makers can get back to business. We will know soon how much of the October swoon was related to interest rate fears and how much was election related. Given the market’s strong initial...
THERE’S MORE TO THE MARKET THAN FAANG
We are at the point in the calendar when the “mid-year market overviews” start to appear, fast and furiously. The theme this year has been how dominant FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) have been in S&P 500 returns...
TWO TANKERS, A NUCLEAR BUTTON, AND YOU
Our posting has been sporadic lately as new business initiatives have kept us away from the keyboard. Distractions we will happily endure, so no complaints. But, in our four months away, we’ve found that . . .absolutely nothing has changed in the markets. Everywhere...
FOCUS ON THE GROWTH. THE REST IS NOISE
Over a year has passed since the election of Donald Trump. It’s been a fascinating period in political circles and, according to CNBC, in investing markets. But has the market really been that interesting? Profitable, no doubt, but from a price action standpoint,...
EARNINGS QUALITY AND THE MARKET – THINGS THAT MAKE YOU GO “HMMM.”
Our friend and partner Charles Trafton of FlowPoint Capital recently pointed out to us some very interesting data: right now growth rates for 2017 EPS are higher for value stocks than growth stocks. He also notes, ironically, that there is no manual for this. He’s...
SOUND PUBLIC POLICY NEVER HURTS
This week, Paul Ryan held a press conference to highlight tax reform initiatives. It didn’t get nearly the attention it deserved. But then, tax policy in general rarely gets the attention it deserves (more on that later). You know what also never gets enough...
THE PROBLEMS WITH ETF’S, PART II: JUNK IN THE TRUNK
We write a lot about return dispersion with respect to stocks – the phenomenon whereby stocks either all move together, or begin to act distinctly. Dispersion comes and goes; when it disappears, like it did eight years ago, passive investing makes a great deal of...
THE PROBLEMS WITH ETF’S, PART I: WHAT YOU DON’T KNOW CAN KILL YOU
In the past few weeks, we have teased a few thoughts on the issues we see in ETF’s. This week, we’re going to start a series called “The Problems in Your ETF.” Today’s post centers again on the levered ETF’s. Many (negative) market commentators point to Central Bank...
CAPE FEAR?
Should we be worried about CAPE, the popular Shiller Cyclically Adjusted Price Earnings ratio? Experts tell us it is trading at exceedingly high levels and, the experts also say, those high levels portend poor stock returns, according to CAPE. We’ve thought about that...
BEFORE YOU BECOME OLD AND WISE, YOU FIRST MUST BE YOUNG AND STUPID
In any general discussion of investment strategies on TV or in the press, the focus quickly and often turns to correlations, standard deviations, Sharpe and Sortino ratios, etc. What’s not discussed enough is “when.” As in, when you get in or out makes all the...
NOT ALL ETF’S ARE CREATED EQUALLY
Last week, amid some controversy, the SEC approved a 4x levered ETF. For a period of time, and rightly, the SEC was considering cracking down on the 2x and 3x levered vehicles so the move to 4x was surprising. Don’t misunderstand, the levered ETF’s offer gigantic...
THE END OF QE
Last week, in a post about current equity market valuations, we identified the unwinding of QE as a possible threat to today’s bull market. Let us be clear: we don’t think the unwinding of QE (which has already begun, actually) will have any material impact on stock...
THE OL’ DOUBLE-EDGED SWORD. . .
Back in January of this year (seems so long ago. . .), headlines in the Canadian financial press were bemoaning the fact that (1) the Canadian economy was growing at its slowest pace in 60 years, and (2) real estate and financial services now account for 20 percent of...
THE PLASTIC IN YOUR WALLET IS NOT CREATED EQUAL
Last week Consumer Lenders started reporting Q1 2017 earnings, which showed above average loan growth and better margins. But, in spite of the improving revenue trends, a surge in credit costs hurt results and stocks in the space sold off hard. It was Déjà vu for...
RISKS TO THE U.S. BULL MARKET, SURE. BUT THIS IS NO 1999.
Not surprisingly, the question most frequently posed by our shareholders, investors and other stakeholders concerns the relative valuation of equity markets. U.S. indexes set new all-time price highs recently and references to the late 90’s are starting to pop up with...
DISPERSION IS BECOMING READILY APPARENT, AND THIS IS GOOD FOR INVESTORS
So we are about halfway through Q1 2017 earnings, and the results are predictably mixed. Our friends at FlowPoint Capital have alerted us to some pretty interesting data that is starting to show up in their proprietary risk screens, namely that the market is...
YOU CAN’T HIDE YOUR LYIN’ EYES
Our friend John Roque, one of Wall Street’s great technicians, often talks to us about the importance of visual affirmation. Let pictures talk. He is speaking of the importance of perspective in analysis and not losing sight of it. The bond market has been...