Green Book October 1990
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Featured Articles
Bond Market Summary
The recent improvement in the bond market is probably not the result of the politicians’ weak kneed program to deal with the deficit. Rather, it more likely stems from the lack of bad news from the Middle East and growing evidence that the economy is in a recession.
Cyclical Bear Market Profiles
Cyclical bear markets typically decline 25%-30%. In terms of amplitude, the bear market could be more than half over…if it’s a typical bear.
Inflation, Deflation and Stock Prices…Update
In examining various consumer and producer price measures going back for as long as 1000 years, it was found that prices have risen about 60% of the time and fallen about 40% of the time in the Western world.
Joke of the Month
Two great jokes this month were deemed inappropriate for publication herein. We are now considering a new soft dollar service: “The Unprintable Joke of the Month”…..inquire as to our pricing for this new Dial-A-Joke service.
Scanning the Markets
A performance rundown for our equity market sectors and other measures ranked by third quarter performance (only three of our sectors were up).
Secondary Stocks/Big Cap Stocks
Secondary stocks were down a big 9%-10% in September compared to 5%-6% declines for the capitalization weighted measures. Year to date, secondary stocks are down twice as much as the cap weighted measures.
Stocks Not Cheap, Stocks Not Expensive
Stocks are now in the high 40%-45% of the historical valuation distribution range. This is not cheap, but neither is it expensive. Based on our Benchmarks work, it now appears we can expect average performance for the stock market from today’s levels over 1, 3 and 10 year time horizons.
The Quarter from Hell?
If you thought the third quarter of 1990 was bad in the U.S. stock market, think of those poor fellas in Tokyo. Of course if your universe is secondary stocks, it was worse than that.
View from the North Country
The recent “surprise” downward revision in quarterly real GNP growth served to drive the majority of investment professionals and economists from the “no recession” camp. Also, Junk Mail Busters and Ken Safian lives!
Table of Contents
Stock Market
- The Quarter from Hell?
- Cyclical Bear Market Profiles
- Secondary Stocks/Big Cap Stocks
- Inflation, Deflation and Stock Prices…Update
- View from the North Country
Of Special Interest
Macro Monitor
Equity Strategies
At Random
Bond Market Summary
The recent improvement in the bond market is probably not the result of the politicians’ weak kneed program to deal with the deficit. Rather, it more likely stems from the lack of bad news from the Middle East and growing evidence that the economy is in a recession.
Cyclical Bear Market Profiles
Cyclical bear markets typically decline 25%-30%. In terms of amplitude, the bear market could be more than half over…if it’s a typical bear.
Inflation, Deflation and Stock Prices…Update
In examining various consumer and producer price measures going back for as long as 1000 years, it was found that prices have risen about 60% of the time and fallen about 40% of the time in the Western world.
Joke of the Month
Two great jokes this month were deemed inappropriate for publication herein. We are now considering a new soft dollar service: “The Unprintable Joke of the Month”…..inquire as to our pricing for this new Dial-A-Joke service.
Scanning the Markets
A performance rundown for our equity market sectors and other measures ranked by third quarter performance (only three of our sectors were up).
Secondary Stocks/Big Cap Stocks
Secondary stocks were down a big 9%-10% in September compared to 5%-6% declines for the capitalization weighted measures. Year to date, secondary stocks are down twice as much as the cap weighted measures.
Stocks Not Cheap, Stocks Not Expensive
Stocks are now in the high 40%-45% of the historical valuation distribution range. This is not cheap, but neither is it expensive. Based on our Benchmarks work, it now appears we can expect average performance for the stock market from today’s levels over 1, 3 and 10 year time horizons.
The Quarter from Hell?
If you thought the third quarter of 1990 was bad in the U.S. stock market, think of those poor fellas in Tokyo. Of course if your universe is secondary stocks, it was worse than that.
View from the North Country
The recent “surprise” downward revision in quarterly real GNP growth served to drive the majority of investment professionals and economists from the “no recession” camp. Also, Junk Mail Busters and Ken Safian lives!
Stock Market
- The Quarter from Hell?
- Cyclical Bear Market Profiles
- Secondary Stocks/Big Cap Stocks
- Inflation, Deflation and Stock Prices…Update
- View from the North Country