Green Book January 2003
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Featured Articles
2002 Dreams And Nightmares….A Look At What Might Have Been
An examination is made of the previous year’s leaders and laggards to see if success could have been attained by buying last years big winners (or the big losers).
A Look In The Rearview Mirror
A critical examination of what we thought was the best of The Leuthold Group’s research in 2002, as well as what was not so good.
Answering Client Questions
Many of the questions in this month’s issue came from December’s client meetings in Chicago.
Bond Market Summary
We believe it is still an opportune time to add to High Yield positions. The economy is improving and corporate profits are rebounding from depressed levels.
December Mutual Fund Flows & 2002 Recap
December proved to be a fitting end to what is now the first net redemption year since 1988. Plus, a preview of the cash flow trends for all major asset categories (using our own December 2002 estimates).
Insider Block Measures....Still Bullish
Through the end of 2002, reported big block net sales totaled $24 billion, compared to net selling of $40 billion in 2001 and $72 billion in 2000.
Is The Stock Market's Current P/E Dangerously High?
It is possible for new bull markets to emerge from high P/E levels. Earnings are cyclical, so when earnings decline in a recession, it can mark a very good buying opportunity despite high P/Es.
Large Cap Versus Small Cap: Inside The S&P 500
Poor performance by large cap technology and nifty fifty type issues had a very negative impact on S&P 500 cap weighted performers for the past three years.
Playing The Bounce Update: Trounced Instead Of Bounced In December
Despite the poor December performance, the total returns from October through December 31st were not too bad compared to the S&P 500.
Scanning The Markets
Despite the strong gains in Q4, the stock market ended 2002 down substantially.
Secular Bear Market Damage
Biggest losers from the March 2000 market peak.
Short Interest....NASDAQ Hits Record High Ratio, As December Volume Plummets
This month’s ratio increased to 3.54 from 2.72, marking the highest ratio ever recorded.
Tech Watch
Technology stocks retreat in December, as our broad tech index lost 16.0%. However for all of Q4 Tech was up 33%.
The Year That Was
Remain bullish on the stock market, but don’t expect Main Street to be a major stock market factor in 2003. Today’s bull market expectations for the DJIA, S&P, and NASDAQ.
To Help You Understand Green Bay Packer Fans
Thanks to Judith Diemer, a former resident of Wisconsin (and Paula Diemer’s mother), for this guidance when associating with and relating to Green Bay Packer fans.
View From The North Country
Valuation tools comparing stock earnings yields to bond yields (i.e. the Fed Valuation Model) are worthless. History shows they don’t perform very well at all.
Volatility Update…..S&P Volatility Highest Since 1938
Volatility in the S&P came down in November and December, but for the entire year the S&P 500 was unusually volatile.
Table of Contents
Stock Market
- View From The North Country
- The Year That Was
- Secular Bear Market Damage
- Playing The Bounce Update: Trounced Instead Of Bounced In December
- Answering Client Questions
- Is The Stock Market's Current P/E Dangerously High?
- 2002 Dreams And Nightmares….A Look At What Might Have Been
- December Mutual Fund Flows & 2002 Recap
- Insider Block Measures....Still Bullish
- Large Cap Versus Small Cap: Inside The S&P 500
- Short Interest....NASDAQ Hits Record High Ratio, As December Volume Plummets
- Volatility Update…..S&P Volatility Highest Since 1938
Of Special Interest
Macro Monitor
Equity Strategies
At Random
2002 Dreams And Nightmares….A Look At What Might Have Been
An examination is made of the previous year’s leaders and laggards to see if success could have been attained by buying last years big winners (or the big losers).
A Look In The Rearview Mirror
A critical examination of what we thought was the best of The Leuthold Group’s research in 2002, as well as what was not so good.
Answering Client Questions
Many of the questions in this month’s issue came from December’s client meetings in Chicago.
Bond Market Summary
We believe it is still an opportune time to add to High Yield positions. The economy is improving and corporate profits are rebounding from depressed levels.
December Mutual Fund Flows & 2002 Recap
December proved to be a fitting end to what is now the first net redemption year since 1988. Plus, a preview of the cash flow trends for all major asset categories (using our own December 2002 estimates).
Insider Block Measures....Still Bullish
Through the end of 2002, reported big block net sales totaled $24 billion, compared to net selling of $40 billion in 2001 and $72 billion in 2000.
Is The Stock Market's Current P/E Dangerously High?
It is possible for new bull markets to emerge from high P/E levels. Earnings are cyclical, so when earnings decline in a recession, it can mark a very good buying opportunity despite high P/Es.
Large Cap Versus Small Cap: Inside The S&P 500
Poor performance by large cap technology and nifty fifty type issues had a very negative impact on S&P 500 cap weighted performers for the past three years.
Playing The Bounce Update: Trounced Instead Of Bounced In December
Despite the poor December performance, the total returns from October through December 31st were not too bad compared to the S&P 500.
Scanning The Markets
Despite the strong gains in Q4, the stock market ended 2002 down substantially.
Secular Bear Market Damage
Biggest losers from the March 2000 market peak.
Short Interest....NASDAQ Hits Record High Ratio, As December Volume Plummets
This month’s ratio increased to 3.54 from 2.72, marking the highest ratio ever recorded.
Tech Watch
Technology stocks retreat in December, as our broad tech index lost 16.0%. However for all of Q4 Tech was up 33%.
The Year That Was
Remain bullish on the stock market, but don’t expect Main Street to be a major stock market factor in 2003. Today’s bull market expectations for the DJIA, S&P, and NASDAQ.
To Help You Understand Green Bay Packer Fans
Thanks to Judith Diemer, a former resident of Wisconsin (and Paula Diemer’s mother), for this guidance when associating with and relating to Green Bay Packer fans.
View From The North Country
Valuation tools comparing stock earnings yields to bond yields (i.e. the Fed Valuation Model) are worthless. History shows they don’t perform very well at all.
Volatility Update…..S&P Volatility Highest Since 1938
Volatility in the S&P came down in November and December, but for the entire year the S&P 500 was unusually volatile.
Stock Market
- View From The North Country
- The Year That Was
- Secular Bear Market Damage
- Playing The Bounce Update: Trounced Instead Of Bounced In December
- Answering Client Questions
- Is The Stock Market's Current P/E Dangerously High?
- 2002 Dreams And Nightmares….A Look At What Might Have Been
- December Mutual Fund Flows & 2002 Recap
- Insider Block Measures....Still Bullish
- Large Cap Versus Small Cap: Inside The S&P 500
- Short Interest....NASDAQ Hits Record High Ratio, As December Volume Plummets
- Volatility Update…..S&P Volatility Highest Since 1938