Latest Research

Select Industries Portfolio is getting exposure to the Energy sector, with the addition of the Oil & Gas Drillers group.

As we expected, it was not a memorable “Playing The Bounce” year.

Modest revisions were made to the industry groups that are evaluated by our GS Score framework. Driving objective was to make all groups more viable for investment consideration.

Quantitative Factor review for January shows Large Caps, Quality, and Profitability factors finally performing well. It’s been over a year since stocks with better Profitability outperformed in an up S&P month.

Quant implications for earnings revisions. Revisions tend to follow actual earnings, not lead them. Better economy now producing upside surprises, which has good short term implications.

The bond bubble is deflating, as investors demand higher yields to compensate for expected rising inflation and the U.S. mountain of debt.

The current period of small cap leadership is the longest ever. And while small caps have been selling at a premium, the premium has persisted for a long time.

All time honored seasonal anomalies are indicating stocks can go higher in 2011. The good news is our Major Trend Index agrees, and has actually been getting stronger the last few weeks.

2010 was better than it felt for the equity markets, but while 2011 may be better for the economy, it might not be as strong for the equity markets. Could the bull market be running out of milestones?

Year-ahead stock market forecasts are now in hot demand, but of course are notoriously off the mark most years. Very long term forecasts (say, out to the end of the decade) are in virtually no demand, but are considerably easier to get close to the mark for those armed with the right tools. 

History appears to be repeating itself as the risk premium for stocks is making a comeback. Ten-year Treasuries are now the riskier asset class compared to equities.

We examine the correlation between CleanTech and Petroleum and find that, contrary to what is commonly believed, the overall correlation between oil prices and Clean Technology shares is rather weak.

If we look only at the past eleven years, 2000-2010, the S&P 500 has decisively underperformed the Russell 2000.

As we expected, it was not a very good “Playing The Bounce” year. Many fund managers still had substantial tax loss carry forwards which they used to offset 2010 gains.

Factor performance during 2010: A review of traditional quantitative factors and their performance for the year.

Two Quant Themes With Significant Implications For 2011. We revisit studies from the past year that focused on Revenue Growth vs. Earnings Growth, as well as Momentum vs. Value.

We raised most of our twelve month yield targets this month, based on higher inflation expectations and U.S. debt concerns. Extremely low yields at the short end of the curve are the result of a stimulative Fed policy. Rising yields at the long end of the curve reflect rising inflation expectations.

TIPS can serve a useful purpose in investment portfolios by protecting purchasing power and diversifying risk. But at current low yields and falling bond prices, they do not offer very substantial returns, unless there is an unexpected surge in CPI inflation over the life of the bond.

Of Special Interest asks “Should You Hold On To Last Year’s Winners?” by examining the Dreams, Nightmares and Bridesmaid strategies. This year, our analysis expands beyond equity groups to the sector and asset class levels.

The latest bull market has now essentially matched the returns for all bull market recoveries dating back to 1900. Remarkably, it has accomplished this in only half the normal time frame.