Green Book December 2004

Adding Agricultural Products To Select Industries "Small Group" Holdings

A new component within Select Industries “Small Group” holding.

Adding Photographic Products To Select Industries "Small Group" Holdings

A new component in new “Small Group” holding within Select Industries.

Answering Client Questions

Jim Floyd devotes several pages of “Inside The Stock Market” to answer client questions. Included are questions about reported versus operating earning, the impact of inflation on small cap stocks, and our rationale behind our interest rate target among others.

Economic Outlook

Deficit narrowing. Last three months’ (including first month of fiscal 2005) receipts remarkably strong, while outlays have declined.

Industrial Metals Stocks: November Rewards The Patient And The Perceptive

Metals stocks quickly made back October’s losses, and more, during the November rally.  

Initiating Strategy To Employ “Small Groups”

Rationale For “Small Group” Equity Portfolio Holding

January Effect: Now Tends To Arrive In December

The January effect still lives…..it just comes a month earlier in December.

Leuthold Small Cap Leadership Model: Improved, But Still Rated Neutral

Small cap stocks continue to be market leaders in November. Our small cap leadership model had a slight improvement, but is still neutral. On a valuation basis, small caps are no longer attractive, but they still look good on a momentum basis.

November Mutual Fund Flows...Investor Demand Surges For Stock Funds

Equity funds with a domestic focus made a big comeback in November, posting the largest monthly net inflow since last February. In fact, more money came in during November alone than in the previous four months combined.

Offshoring The Next Bubble?

Main Street’s rush into international stock funds could be foreshadowing tougher times ahead for foreign markets.

Prescription Drug Plan

Profit Margins: It Don’t Get Any Better Than This

Estimated year end profit margins are expected to be at 7.4%, the highest level dating back to at least 1955.

Recent Surge In CPI/PPI Inflation Temporary, Not Sustainable

Higher oil prices and higher food prices pushed recent CPI and PPI higher. Next month’s readings will likely show less inflation with oil prices coming down some recently.

The Impact Of Increasing Interest Rates By The Fed

Historically, the first few increases do not have an adverse impact on the stock market on a longer term basis (6 to 12 months). However, stocks do tend to take a hit after the fourth or fifth rate hike on a 6 to 12 month time horizon.

View From The North Country

Steve’s assessment of the current bullish and bearish factors. Also, Leuthold’s recent discussion of secular bear markets, sparked some debate among readers.