Inside The Stock Market ...trends, cross-currents, and outlook
Volatility Update
S&P 500 volatility running strong in January while the NASDAQ is still high but down from peaks.
Answering Client Questions
Many of the questions in this month’s issue came from January client meetings in Texas.
December Mutual Fund Flows & 2002 Recap
December proved to be a fitting end to what is now the first net redemption year since 1988. Plus, a preview of the cash flow trends for all major asset categories (using our own December 2002 estimates).
Secular Bear Market Damage
Biggest losers from the March 2000 market peak.
Insider Block Measures....Still Bullish
Through the end of 2002, reported big block net sales totaled $24 billion, compared to net selling of $40 billion in 2001 and $72 billion in 2000.
Playing The Bounce Update: Trounced Instead Of Bounced In December
Despite the poor December performance, the total returns from October through December 31st were not too bad compared to the S&P 500.
Large Cap Versus Small Cap: Inside The S&P 500
Poor performance by large cap technology and nifty fifty type issues had a very negative impact on S&P 500 cap weighted performers for the past three years.
Answering Client Questions
Many of the questions in this month’s issue came from December’s client meetings in Chicago.
Short Interest....NASDAQ Hits Record High Ratio, As December Volume Plummets
This month’s ratio increased to 3.54 from 2.72, marking the highest ratio ever recorded.
Is The Stock Market's Current P/E Dangerously High?
It is possible for new bull markets to emerge from high P/E levels. Earnings are cyclical, so when earnings decline in a recession, it can mark a very good buying opportunity despite high P/Es.
View From The North Country
Valuation tools comparing stock earnings yields to bond yields (i.e. the Fed Valuation Model) are worthless. History shows they don’t perform very well at all.
Volatility Update…..S&P Volatility Highest Since 1938
Volatility in the S&P came down in November and December, but for the entire year the S&P 500 was unusually volatile.
2002 Dreams And Nightmares….A Look At What Might Have Been
An examination is made of the previous year’s leaders and laggards to see if success could have been attained by buying last years big winners (or the big losers).
The Year That Was
Remain bullish on the stock market, but don’t expect Main Street to be a major stock market factor in 2003. Today’s bull market expectations for the DJIA, S&P, and NASDAQ.
View From The North Country
Thermal pollution time again. Leuthold’s New Year predictions for 2003.
Eight Weeks Up....Now What?
Assessing Market Risk. We see minor or minimal risk from the economy, inflation, and earnings. But, terrorist attacks and valuations could be more significant risk. Iraq is a moderate short term risk.
Volatility Update…..S&P Volatility Highest Since 1938
YTD instances of High Volatility (50%) is still well above the 2000-2001 levels. It is, in fact, the highest volatility reading since 1938, and the fifth highest since 1900.
January Effect: Now Arrives In December
Buy now to play January effect. Every year, over the last ten years, small caps have beaten the large caps in December!
Playing The Bounce Update: Big Bounce In October/November
It has so far been a great period for the October bounce stocks (with a big boost for the market itself).
Short Interest...Still High Despite October And November Performance
While short interest has retreated slightly, it still remains quite high, indicating there may be more upside pressure from short covering.
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