Green Book June 1986
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Featured Articles
Bond Market Summary
May saw the T-bond market come down into our buying zone and we are buyers in this issue. We expect 7% on T-bonds before 1986 is over (now 8.50%) and maybe lower. The stock and bond markets do not have to move together as May clearly demonstrated.
Is the “Big Shrink” Yesterday’s News?
In 1984 and 1985, retirement of corporate stock was running far in excess of new issues, but we doubt if this is true in 1986. Equity offerings are now in excess of the former peak levels in mid-1983. All in all, the “big shrink” is no longer a valid part of the stock market bull’s case.
May Cross Currents
The stock market and bond market diverged rather sharply in May, with most market averages up about 5%, while bonds moved lower, especially long T-bonds, which fell over 6%.
More Historical Perspective Featuring Book Value Ratios
Book value has its faults as an analytical tool with individual stocks, but it seems to be quite valid in the aggregate as a stock market value gauge. This most recent addition to our value benchmark series presents quarterly book value ratios for the S&P 400 on a quarterly basis, 1929 to date.
So Why Don’t You Send a Kid to Camp?
Yes, there is a money management camp in Palm Beach, Florida (where else?) and at The Breakers. Sound like great fund for the kiddies?
The Growth Stock Bargain Basket Returns
This issue we are making this computer screened quantitative theme a formal part of the equity model portfolio. It had been absent from the model since the fall of 1983. Floyd and Leuthold have tuned up this screen over the last few years and believe it is an excellent stock selection technique for the current environment.
View from the North Country
The rank and file in unions are becoming increasingly restless and dissatisfied with national union leadership. This could lead to more strikes, maverick unions, increased militancy, along with a decline in overall union membership. Some clues to the future may be found in the Hormel labor-management conflict in Austin, Minnesota.
What Happened to the Correction?
The Major Trend Index now reads “Neutral.” This 25-year-old composite index says the evidence is now evenly divided between bull and bear. Thus, at this point our best advice is to stand pat in terms of equity exposure.
Table of Contents
Stock Market
- View from the North Country
- What Happened to the Correction?
- Is the “Big Shrink” Yesterday’s News?
- May Cross Currents
Of Special Interest
Macro Monitor
Equity Strategies
At Random
Bond Market Summary
May saw the T-bond market come down into our buying zone and we are buyers in this issue. We expect 7% on T-bonds before 1986 is over (now 8.50%) and maybe lower. The stock and bond markets do not have to move together as May clearly demonstrated.
Is the “Big Shrink” Yesterday’s News?
In 1984 and 1985, retirement of corporate stock was running far in excess of new issues, but we doubt if this is true in 1986. Equity offerings are now in excess of the former peak levels in mid-1983. All in all, the “big shrink” is no longer a valid part of the stock market bull’s case.
May Cross Currents
The stock market and bond market diverged rather sharply in May, with most market averages up about 5%, while bonds moved lower, especially long T-bonds, which fell over 6%.
More Historical Perspective Featuring Book Value Ratios
Book value has its faults as an analytical tool with individual stocks, but it seems to be quite valid in the aggregate as a stock market value gauge. This most recent addition to our value benchmark series presents quarterly book value ratios for the S&P 400 on a quarterly basis, 1929 to date.
So Why Don’t You Send a Kid to Camp?
Yes, there is a money management camp in Palm Beach, Florida (where else?) and at The Breakers. Sound like great fund for the kiddies?
The Growth Stock Bargain Basket Returns
This issue we are making this computer screened quantitative theme a formal part of the equity model portfolio. It had been absent from the model since the fall of 1983. Floyd and Leuthold have tuned up this screen over the last few years and believe it is an excellent stock selection technique for the current environment.
View from the North Country
The rank and file in unions are becoming increasingly restless and dissatisfied with national union leadership. This could lead to more strikes, maverick unions, increased militancy, along with a decline in overall union membership. Some clues to the future may be found in the Hormel labor-management conflict in Austin, Minnesota.
What Happened to the Correction?
The Major Trend Index now reads “Neutral.” This 25-year-old composite index says the evidence is now evenly divided between bull and bear. Thus, at this point our best advice is to stand pat in terms of equity exposure.
Stock Market
- View from the North Country
- What Happened to the Correction?
- Is the “Big Shrink” Yesterday’s News?
- May Cross Currents