Green Book June 2020
A Stock Market Brain Teaser
The bull and bear labels can be dangerous to stock market operators, so much so that famed speculator Jesse Livermore is said to have abandoned them in favor of softer terminology: “Lines of least resistance.” We aren’t about to ditch the old labels, or even our collection of bull and bear bookends.
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Featured Articles
Revenge Of The Nerds?
Last month we detailed two technical shortcomings of the rally off the March 23rd market low. The stock market duly noted our critique and has issued its response.
“Normalizing” For The Earnings Collapse
Stocks (and more specifically, U.S. blue chips) did not fully (nor even approximately) discount the economic calamity. The result is that, in just over two months, the “baby bull”—if that’s what it is—has achieved what took his legendary predecessor more than eight years to accomplish: Top 25x on our Normalized P/E.
The Money Supply Isn’t Magic
Imagine our surprise when the bullish stock market narrative is suddenly all about money. Cynically, though, that might be because money supply and the unemployment rate are the only economic data series staging upside breakouts, and the latter doesn’t lend itself to a good narrative.
Small Cap Valuations: Zombies And Ragamuffins
Asset allocation decisions are fairly straightforward for groups of profitable and growing companies that fit nicely into a discounted cash flow model, but it is more difficult to describe the valuation of groups that include unprofitable companies.
Money Losers Among Small-Cap Growth
Late last year, we presented data showing that profitability has become more elusive for small companies despite a record-long period of economic expansion. We discussed the potential causes underlying this phenomenon.
The State Of The Stock/Bond Relationship
The latest action in rates is not what would be expected during a strong stock-market rally off a bear market low, but the constantly changing nature of the stock/bond relationship should not come as a big surprise. We propose a more refined four-state definition of the stock/bond relationship.
Pockets Of Strength Among Discretionary Industries
A brief overview of two (very different) Attractively-rated Discretionary groups that are longstanding SI portfolio holdings that have managed to maintain their “Attractiveness” throughout the tumult.
A Long Boom, And The Ultimate Bust
Last December, we marveled at the disconnect between the (surging) S&P 500 and the (sagging) Boom/Bust Indicator. Just six months later, we can only scratch our heads at what the hell we were complaining about.
Table of Contents
Stock Market
- Money Losers Among Small-Cap Growth
- A Stock Market Brain Teaser
- Revenge Of The Nerds?
- “Not Quite” Super
- “Normalizing” For The Earnings Collapse
- “Peaking” Into The Future
- The Wrong Kind Of “Head Start”
- A Bear That Left VLT Unscathed?
- A Long Boom, And The Ultimate Bust
- Sentimental Musings
- The Money Supply Isn’t Magic
Of Special Interest
Macro Monitor
Equity Strategies
- S&P 500 Sector Leaders Since Market Top
- Pockets Of Strength Among Discretionary Industries
- Sector Rankings
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Revenge Of The Nerds?
Last month we detailed two technical shortcomings of the rally off the March 23rd market low. The stock market duly noted our critique and has issued its response.
“Normalizing” For The Earnings Collapse
Stocks (and more specifically, U.S. blue chips) did not fully (nor even approximately) discount the economic calamity. The result is that, in just over two months, the “baby bull”—if that’s what it is—has achieved what took his legendary predecessor more than eight years to accomplish: Top 25x on our Normalized P/E.
The Money Supply Isn’t Magic
Imagine our surprise when the bullish stock market narrative is suddenly all about money. Cynically, though, that might be because money supply and the unemployment rate are the only economic data series staging upside breakouts, and the latter doesn’t lend itself to a good narrative.
Small Cap Valuations: Zombies And Ragamuffins
Asset allocation decisions are fairly straightforward for groups of profitable and growing companies that fit nicely into a discounted cash flow model, but it is more difficult to describe the valuation of groups that include unprofitable companies.
Money Losers Among Small-Cap Growth
Late last year, we presented data showing that profitability has become more elusive for small companies despite a record-long period of economic expansion. We discussed the potential causes underlying this phenomenon.
The State Of The Stock/Bond Relationship
The latest action in rates is not what would be expected during a strong stock-market rally off a bear market low, but the constantly changing nature of the stock/bond relationship should not come as a big surprise. We propose a more refined four-state definition of the stock/bond relationship.
Pockets Of Strength Among Discretionary Industries
A brief overview of two (very different) Attractively-rated Discretionary groups that are longstanding SI portfolio holdings that have managed to maintain their “Attractiveness” throughout the tumult.
A Long Boom, And The Ultimate Bust
Last December, we marveled at the disconnect between the (surging) S&P 500 and the (sagging) Boom/Bust Indicator. Just six months later, we can only scratch our heads at what the hell we were complaining about.
Stock Market
- Money Losers Among Small-Cap Growth
- A Stock Market Brain Teaser
- Revenge Of The Nerds?
- “Not Quite” Super
- “Normalizing” For The Earnings Collapse
- “Peaking” Into The Future
- The Wrong Kind Of “Head Start”
- A Bear That Left VLT Unscathed?
- A Long Boom, And The Ultimate Bust
- Sentimental Musings
- The Money Supply Isn’t Magic
Of Special Interest
Macro Monitor
Equity Strategies
- S&P 500 Sector Leaders Since Market Top
- Pockets Of Strength Among Discretionary Industries
- Sector Rankings