Green Book January 2022
Beware The Hot Air...
Mask mandates are back in vogue, and it’s investors who should be the first to welcome them: They’ll protect us from January’s blast of “thermal pollution,” when Wall Street prognosticators expel large volumes of hot air with prophesies for the new year. We have no problem with the exercise—so long as full-year forecasts (including one’s own) aren’t taken too seriously. “Forecasts are for show,” Steve Leuthold would always say.
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Featured Articles
Time Cycles Say There’ll Be Better Times Than 2022
Numerologists will be disappointed to learn that longer-term time cycles don’t line up for a prosperous 2022 for stocks. However, the historical “hit rates” aren’t high enough to justify running for cover if you have no other fundamental stock-market worries.
A Squandered Small-Cap Opportunity?
We know our view on this is controversial, but we like the relative prospects for Small Caps—even though we still believe the broad stock market is currently the most speculative one in U.S. history.
Weigh Those Bags Before Checkout
You’ve likely heard of “shrinkflation,” the practice in which a package of M&M’s is reduced from 40 pieces to 32, while the price per bag is unchanged. Publicly-traded companies have been engaged in similar schemes for awhile.
2021 Surprises & 2022 Time Cycles
Market revelations were certainly not in short supply in 2021. We believe some of those surprises will continue to have a huge impact on markets in 2022. We have updated our time-cycle composites to provide an idea of what a “typical” 2022 could look like.
Research Preview: Style Swings In 2021
Despite elevated uncertainty over pandemic developments and expected policy tightening, and in the face of aggressive valuations, the S&P 500 still managed to gain a delightful +28.7% in 2021. Even more noteworthy, in our opinion, is that this advance came with nary a single correction of more than 10%.
2021 Quantitative Factor Performance: Year In Review
After years of underperformance, Value was finally productive—it was the best factor we track. In general, overall factor performance was good, but worked much better within small- and mid-caps compared to large-caps. Value was especially superior outside of the large-cap universe.
Leuthold’s Industry Group “Dreams” And “Nightmares”— Annual Update
We take a look at our historical analysis of industry-group portfolios to see how the “Dreams” and “Nightmares” from 2020 fared in 2021. The industry composition of the 2021 Dream and Nightmare portfolios is also presented.
Carbon-Dating The Recovery
If January is the 21st month of the recovery, then time has elapsed in “dog years.” And that might put this “canine” recovery at around 12 years—just shy of where we might be had COVID never occurred!
Previous Inflow Records Shattered
Bond mutual funds had a stellar 2021. With data available through November, this subset has already amassed YTD net-cash inflow trumping 2009’s all-time record.
Table of Contents
Stock Market
- Asset Allocation: A Rising Tide Lifts Most Boats
- Rewarding “Perfect Foresight”
- Momentum: Not Just For Stock Pickers
- Bridesmaid Strategy Risk/Reward
- Bridesmaid Track Record
- Bridesmaid Strategy For Equity Managers
- Bridesmaid Sector Track Record
- A Good Year For Cheapskates
- Cheapest Sector Track Record
- Beware The Hot Air...
- Weigh Those Bags Before Checkout
- A Dose Of Hindsight For 2022...
- Carbon-Dating The Recovery
- New-Era Profits, New-Era P/E Multiples
- Fat Profit Margins? Thank Your Grandkids!
- Even “True Believers” Should Read This
- Time Cycles Say There’ll Be Better Times Than 2022
- The “Star” Is Not Aligned For 2022
- A Squandered Small-Cap Opportunity?
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Fund Flow Trends
Estimating the Downside
At Random
Time Cycles Say There’ll Be Better Times Than 2022
Numerologists will be disappointed to learn that longer-term time cycles don’t line up for a prosperous 2022 for stocks. However, the historical “hit rates” aren’t high enough to justify running for cover if you have no other fundamental stock-market worries.
A Squandered Small-Cap Opportunity?
We know our view on this is controversial, but we like the relative prospects for Small Caps—even though we still believe the broad stock market is currently the most speculative one in U.S. history.
Weigh Those Bags Before Checkout
You’ve likely heard of “shrinkflation,” the practice in which a package of M&M’s is reduced from 40 pieces to 32, while the price per bag is unchanged. Publicly-traded companies have been engaged in similar schemes for awhile.
2021 Surprises & 2022 Time Cycles
Market revelations were certainly not in short supply in 2021. We believe some of those surprises will continue to have a huge impact on markets in 2022. We have updated our time-cycle composites to provide an idea of what a “typical” 2022 could look like.
Research Preview: Style Swings In 2021
Despite elevated uncertainty over pandemic developments and expected policy tightening, and in the face of aggressive valuations, the S&P 500 still managed to gain a delightful +28.7% in 2021. Even more noteworthy, in our opinion, is that this advance came with nary a single correction of more than 10%.
2021 Quantitative Factor Performance: Year In Review
After years of underperformance, Value was finally productive—it was the best factor we track. In general, overall factor performance was good, but worked much better within small- and mid-caps compared to large-caps. Value was especially superior outside of the large-cap universe.
Leuthold’s Industry Group “Dreams” And “Nightmares”— Annual Update
We take a look at our historical analysis of industry-group portfolios to see how the “Dreams” and “Nightmares” from 2020 fared in 2021. The industry composition of the 2021 Dream and Nightmare portfolios is also presented.
Carbon-Dating The Recovery
If January is the 21st month of the recovery, then time has elapsed in “dog years.” And that might put this “canine” recovery at around 12 years—just shy of where we might be had COVID never occurred!
Previous Inflow Records Shattered
Bond mutual funds had a stellar 2021. With data available through November, this subset has already amassed YTD net-cash inflow trumping 2009’s all-time record.
Stock Market
- Asset Allocation: A Rising Tide Lifts Most Boats
- Rewarding “Perfect Foresight”
- Momentum: Not Just For Stock Pickers
- Bridesmaid Strategy Risk/Reward
- Bridesmaid Track Record
- Bridesmaid Strategy For Equity Managers
- Bridesmaid Sector Track Record
- A Good Year For Cheapskates
- Cheapest Sector Track Record
- Beware The Hot Air...
- Weigh Those Bags Before Checkout
- A Dose Of Hindsight For 2022...
- Carbon-Dating The Recovery
- New-Era Profits, New-Era P/E Multiples
- Fat Profit Margins? Thank Your Grandkids!
- Even “True Believers” Should Read This
- Time Cycles Say There’ll Be Better Times Than 2022
- The “Star” Is Not Aligned For 2022
- A Squandered Small-Cap Opportunity?