Green Book February 2011
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Featured Articles
A “Late-Cycle” Economy?
Economic growth is re-accelerating, but that growth is coming at a cost…price pressures are building significantly. Manufacturing prices are up along with commodity prices.
A “Textbook” Start To 2011
All time honored seasonal anomalies are indicating stocks can go higher in 2011. The good news is our Major Trend Index agrees, and has actually been getting stronger the last few weeks.
Adding Energy To Select Industries - New Oil & Gas Drilling Portfolio Group
Select Industries Portfolio is getting exposure to the Energy sector, with the addition of the Oil & Gas Drillers group.
Earnings Revisions Stay Positive For Now
Quant implications for earnings revisions. Revisions tend to follow actual earnings, not lead them. Better economy now producing upside surprises, which has good short term implications.
Global Valuations: Reverting To The Trough
From our perspective as disciples of Normalized EPS, the entire bull market to date has come from P/E expansion. However, that stands to change as global Normalized EPS are again on the rise.
Inflation Acceleration In 2011
By keeping interest rates at extreme lows and printing money, the Fed is trying to reflate, convincing consumers to spend, not save and investors to buy riskier assets.
January Performance: Quality and Size Take The Lead...Finally
Quantitative Factor review for January shows Large Caps, Quality, and Profitability factors finally performing well. It’s been over a year since stocks with better Profitability outperformed in an up S&P month.
Less Is More: Refinements To Our GS Score Groups
Modest revisions were made to the industry groups that are evaluated by our GS Score framework. Driving objective was to make all groups more viable for investment consideration.
Playing The Bounce 2010—Final Scorecard
As we expected, it was not a memorable “Playing The Bounce” year.
Smoothing Out The Cycle… And The “Psyche”
Fundamental rationales also have strong psychological elements. Normalizing earnings helps minimize the startling impact of declining earnings.
The Bond Bubble Is Beginning To Deflate… Is The Cheap Money Era Ending?
The bond bubble is deflating, as investors demand higher yields to compensate for expected rising inflation and the U.S. mountain of debt.
U.S. Small Caps: Carving Out A Very Long Top
The current period of small cap leadership is the longest ever. And while small caps have been selling at a premium, the premium has persisted for a long time.
Table of Contents
Stock Market
- A “Textbook” Start To 2011
- Smoothing Out The Cycle… And The “Psyche”
- Global Valuations: Reverting To The Trough
- A “Late-Cycle” Economy?
- Playing The Bounce 2010—Final Scorecard
Of Special Interest
Macro Monitor
Equity Strategies
- Adding Energy To Select Industries - New Oil & Gas Drilling Portfolio Group
- Less Is More: Refinements To Our GS Score Groups
Quant
- January Performance: Quality and Size Take The Lead...Finally
- Earnings Revisions Stay Positive For Now
Inflation Watch
A “Late-Cycle” Economy?
Economic growth is re-accelerating, but that growth is coming at a cost…price pressures are building significantly. Manufacturing prices are up along with commodity prices.
A “Textbook” Start To 2011
All time honored seasonal anomalies are indicating stocks can go higher in 2011. The good news is our Major Trend Index agrees, and has actually been getting stronger the last few weeks.
Adding Energy To Select Industries - New Oil & Gas Drilling Portfolio Group
Select Industries Portfolio is getting exposure to the Energy sector, with the addition of the Oil & Gas Drillers group.
Earnings Revisions Stay Positive For Now
Quant implications for earnings revisions. Revisions tend to follow actual earnings, not lead them. Better economy now producing upside surprises, which has good short term implications.
Global Valuations: Reverting To The Trough
From our perspective as disciples of Normalized EPS, the entire bull market to date has come from P/E expansion. However, that stands to change as global Normalized EPS are again on the rise.
Inflation Acceleration In 2011
By keeping interest rates at extreme lows and printing money, the Fed is trying to reflate, convincing consumers to spend, not save and investors to buy riskier assets.
January Performance: Quality and Size Take The Lead...Finally
Quantitative Factor review for January shows Large Caps, Quality, and Profitability factors finally performing well. It’s been over a year since stocks with better Profitability outperformed in an up S&P month.
Less Is More: Refinements To Our GS Score Groups
Modest revisions were made to the industry groups that are evaluated by our GS Score framework. Driving objective was to make all groups more viable for investment consideration.
Playing The Bounce 2010—Final Scorecard
As we expected, it was not a memorable “Playing The Bounce” year.
Smoothing Out The Cycle… And The “Psyche”
Fundamental rationales also have strong psychological elements. Normalizing earnings helps minimize the startling impact of declining earnings.
The Bond Bubble Is Beginning To Deflate… Is The Cheap Money Era Ending?
The bond bubble is deflating, as investors demand higher yields to compensate for expected rising inflation and the U.S. mountain of debt.
U.S. Small Caps: Carving Out A Very Long Top
The current period of small cap leadership is the longest ever. And while small caps have been selling at a premium, the premium has persisted for a long time.
Stock Market
- A “Textbook” Start To 2011
- Smoothing Out The Cycle… And The “Psyche”
- Global Valuations: Reverting To The Trough
- A “Late-Cycle” Economy?
- Playing The Bounce 2010—Final Scorecard
Of Special Interest
Macro Monitor
Equity Strategies
- Adding Energy To Select Industries - New Oil & Gas Drilling Portfolio Group
- Less Is More: Refinements To Our GS Score Groups
Quant
- January Performance: Quality and Size Take The Lead...Finally
- Earnings Revisions Stay Positive For Now