Inside The Stock Market ...trends, cross-currents, and outlook
Inside the Stock Market
April was disappointing. A better market was expected. The lack of deficit reducing progress in Washington is disturbing; but our Major Trend Index, while losing some points from last month, is still comfortably positive. At this point it is appropriate to be guided by the Index rather than emotions.
High P/E Quality Stocks Now Cheap
High P/E Quality stocks are now very cheap on a relative basis, at least when compared to low P/E stocks. Unfortunately, our timing work does not yet show favorable market momentum developing for these issues.
View from the North Country
The Value of “Independence”: There are many changes going on in the third-party research business, changes that potentially may have a major impact on independent research firms such as The Leuthold Group…..Don’t Blame It All on the Dollar: The overpriced dollar is hardly the cause of all this country’s balance of payment woes.
Inside the Stock Market
March was a month of divergences, but April is expected to be a good up month. The Major Trend Index remains comfortably positive, though less so than a month ago. Our Early Warning Work still advises some short-term caution, but could change momentarily.
When is the Last Time You Exclaimed, “AHA!”?
Back in June 1984, after returning from the Market Technicians annual rendezvous, I enthusiastically wrote about a presentation given by Ted Theodore of Morgan Stanley Asset Management on the roles of lateral and vertical thinking in investment management. Here it is, reprinted with Ted’s permission.
View from the North Country
Seventeen inches of snow is one view from the North Country. Read on to find a somewhat less pleasant view, a discussion of the farm crisis, including its implications for common stock investors as well as longer term ramifications.
Inside the Stock Market
February was a healthy consolidation. Higher prices are expected shorter-term and longer-term. The Major Trend Index continues to register powerful readings. The Early Warning Index of intermediate peaks remains positive, but the margin is narrower than a month ago.
Annual Component Changes in Royal Blue Index This Issue
Turnover in the top 60 stocks most heavily owned by institutions is higher than normal. Some of the changes were expected while others were mild surprises.
Stocks That Are “Over-Owned”
Start to worry when over 60% of a company’s shares are held by institutions. When a heavily owned stock disappoints its holders, watch out. In this section, 42 stocks are listed where 75 or more institutions cumulatively own more than two thirds of the shares outstanding.
View from the North Country
It Feels Good: For the first time in a long time, equities are more heavily weighted than bonds in our Asset Allocation Models… Wanted: Potential High-Tech Survivors: We want to add about five more names to the potential survivor list and are open to suggestions… Pension Fund Shrink: The dramatic changes now taking place in private pension funds and the investment implications thereof.
Inside the Stock Market
The caution flags were taken down in January. This is one of the most powerful looking markets I have seen in my 24 years in the business.
Results of December Year End Bottom Fishing Expedition
The twelve stocks on the list that we especially recommended were up an average of 19%. Once again, this exercise proved to be an effective trading strategy...of course the overall market did help us out a bit this year.
A Look in the Rearview Mirror
This annual exercise is a critical review of the studies, portfolio shifts, recommendations and market strategies as presented in this publication over the last year or so...both the good and the bad.
View from the North Country
It is 1985 prediction time. Wall Street Is filled with hot air. We add to this thermal pollution with our own predictions for the 1985 economy, earnings, inflation, deficits, Interest rates, value of the dollar and the stock market.
Dreams & Nightmares
1984's Institutional "dream" portfolio made up of the twenty best performing large cap stock groups was up 20% (excluding dividends) while the aggressive "dream" portfolio was up 33%. The "nightmare" portfolio, constructed of the twenty worst groups was down 49%. See? Things could have been worse…
Early 1985: Getting Cash Comfortable
1985 has started out with a thud.
View from the North Country
Not Exactly a Holiday Greeting: I have become even more convinced that the current upside potential in the stock market is quite limited as long as the deficit stalemate prevails…. Throbbing in Minnesota: It is hoped this will explain to clients why the Leuthold Group finds Minnesota such a glorious location for its research operation.
Inside the Stock Market
Shorter-term, the decline may continue. Our Early Warning Work registered a negative reading Oct. 30 but is now neutral. At least, a trading opportunity may develop soon. Our focus is on the deficit dilemma. The Major Trend Index continues to read positive, but down a bit from last month.
View from the North Country
From a shorter-term tactical standpoint, we have lit the caution light for both the stock market and bond market. However, there are some possible post-election developments that would be cause for changing this somewhat defensive stance and once again becoming totally committed to stocks and bonds.
Inside the Stock Market
The DJIA and S&P were unchanged for the month while the unweighted indices declined one or two percent. For two months in a row now, equities have lagged far behind bonds. There were however some groups and sectors that performed pretty well in October.
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