Kaminsky's Call: Actionable Intelligence from Wall Street Insiders 


Quarter end is always a time for reflection, and if you're in the red, anxiety. Fortunately, many of our guests, "got it right," during the month.

Wall Street sign

But instead of heaping praise on a group that is perhaps too humble to accept it in the first place, I thought I'd do something more valuable. I thought I'd check in with them to see if they still believed in their respective investment outlooks.

Here is what they said.

I'll begin with Jeff Kronthal, Co-Manager of KLS Diversified Asset Management. His prediction during his early summer appearances was that the 10-year yield would continue to move lower again in September.

He could not have been more on target.

Kronthal's call was formulated on his point that the debt leveraging that had occurred over the last decade (even twenty years) was not even close to being unwound.

Yesterday, Kronthal told me he thinks the 2.25 call on the 10-yr makes sense with a chance to go even lower as the economy has not picked up a lot of steam. He argues that if the Fed does buy $1T treasuries as part of QE 2 at a time when the financing needs of the government are actually dropping, it is possible to expect that it could drive 10yr rates below 2.25.

Next, we note how Charles Kantor, a former colleague of mine at Neuberger Berman, predicted an equity rallyduring his August 16th appearance. His view was that the riskiest assets, particularly equities and high-yield junk, would do best in this climate. When only the latter rose, Kantor found it unusual as the two should have traded in tandem. Since this appearance, the disconnect started resolving as the S&P has rallied 8 percent.

He reiterated that to junk when we spoke yesterday. With global growth misunderstood by many, Kantor argues that leading indicators could lift the equity markets even higher.

Our third and final observation belongs to Bob Profusek, Global Head of M&A at Jones Day. Profusek predicted that small deals would keep proliferating and this has certainly been the case. The massive amounts of cash on company balance sheets provided hint that M&A would continue to rise. But he did not stop here when we spoke yesterday.

The macro factors, Profusek said, especially globalization and business process changes mandated by technology, will extend the dealmaking duration. And absent an intervening geopolitical event, he fully expects 2011 to eclipse the $4 trillion record set for M&A in 2006.

As we go deeper into autumn, the K-Call will continue to evaluate calls made on our show and further, continue off-screen dialogue to deliver valuable intelligence.

And of course, while it is of great value to check in with the winners, it is frequently the off-the-mark predictions that can teach us the most. Tomorrow, I will assess one of my bigger missed calls and determine what we've learned.

Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.

Gary Kaminsky does not hold any equity positions.

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