Green Book October 2011
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Featured Articles
Bear Market Facts—A Refresher
This month’s “Of Special Interest” examines the bear market facts. Doug Ramsey doesn’t expect the current bear market to reach historical bear market medians in terms of decline or duration. Non-economic bear markets are usually much shorter than recession-induced bears.
Biotechnology - New Portfolio Holding
Select Industries Equity Portfolio established new holding in Biotech, which boosted Health Care exposure in that portfolio to over 45% of assets.
Leuthold Stock Quality Rankings—Tracking Quality And Risk Cycles
A new High Quality Cycle has clearly emerged and is going strong. Note that the previous High Quality Cycle started at the end of 2007 and lasted more than a year.
Record Performance Correlations Continue
Industry groups and stocks continue to set records with performance correlations. Defensive groups have seen the largest percentage gain to current correlations relative to the last five years. There truly has been no place to hide in this market.
Risk Contagion Underway, But There Is A Silver Lining
A Risk Contagion is now underway, and we continue to stay defensive and favor higher quality assets within the fixed income space. A silver lining: When the Risk Aversion Index moves above 1, odds start to favor a decrease in risk aversion going forward. The bulk of the move is probably done.
Worse Than It Looks… And Not Over
Most costly market decoy in the last six weeks has been unusual (relative) strength of the Dow and S&P 500 indexes. Resilience in blue chips is characteristic of the early and middle phases of a bear market, but recent blue chip performance has been so stellar (again, in a relative sense) that most investors curled up comfortably in the “correction” camp…while small caps, cyclicals and virtually all foreign markets were screaming “BEAR!”
Table of Contents
Stock Market
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Bear Market Facts—A Refresher
This month’s “Of Special Interest” examines the bear market facts. Doug Ramsey doesn’t expect the current bear market to reach historical bear market medians in terms of decline or duration. Non-economic bear markets are usually much shorter than recession-induced bears.
Biotechnology - New Portfolio Holding
Select Industries Equity Portfolio established new holding in Biotech, which boosted Health Care exposure in that portfolio to over 45% of assets.
Leuthold Stock Quality Rankings—Tracking Quality And Risk Cycles
A new High Quality Cycle has clearly emerged and is going strong. Note that the previous High Quality Cycle started at the end of 2007 and lasted more than a year.
Record Performance Correlations Continue
Industry groups and stocks continue to set records with performance correlations. Defensive groups have seen the largest percentage gain to current correlations relative to the last five years. There truly has been no place to hide in this market.
Risk Contagion Underway, But There Is A Silver Lining
A Risk Contagion is now underway, and we continue to stay defensive and favor higher quality assets within the fixed income space. A silver lining: When the Risk Aversion Index moves above 1, odds start to favor a decrease in risk aversion going forward. The bulk of the move is probably done.
Worse Than It Looks… And Not Over
Most costly market decoy in the last six weeks has been unusual (relative) strength of the Dow and S&P 500 indexes. Resilience in blue chips is characteristic of the early and middle phases of a bear market, but recent blue chip performance has been so stellar (again, in a relative sense) that most investors curled up comfortably in the “correction” camp…while small caps, cyclicals and virtually all foreign markets were screaming “BEAR!”