Latest Research

Using the ratio of MZM relative to total stock market capitalization as a gauge of market liquidity, shows there is a lot of fuel that can be put to work to drive a stock market rally.

The November leg down in stocks was brutal. However, from a technical perspective, the decline was accompanied by the kind of  “positive divergences” that typically appear at major lows.

It may not be a very good “Playing The Bounce” year. Not very many investors or portfolio managers have capital gains to offset.

Mild deflation is nothing to fear: An environment of 0% to 2.4% deflation has proven to be one of the more conducive environments for stocks.

New Select Industries Portfolio equity group positions being established in Systems Software and Small/Micro Cap Biotech.

Based on economic recessions, the sweet spot for stock accumulation seems to be upon us. Valuations also very compelling.

Normalized P/E ratios show stock market to be cheap, but what are “normalized earnings”? We present our methodology and rationale is this month’s “Inside The Stock Market” section. While U.S. stocks are cheap, foreign stock markets look even cheaper.

There was $84 billion coming out of U.S. stock and bond funds in October, the highest net redemptions ever. Second highest month of outflow came in September 2008 (just a month earlier). To us, this looks like a case of capitulation by the public.

Info Tech has demonstrated an ability to lead coming out of bear markets, but still not seeing overall GS Score strength in the sector.

Mark Twain observed more than a century ago that October represented a “peculiarly dangerous” month to speculate in stocks—with the other dangerous times including the remaining 11 months on the calendar.

It may not be a very good “Playing The Bounce” year...

Small Cap leadership trend maybe re-emerging. Doug Ramsey examines Small Cap performance coming out of bear markets. Historically, they have been able to do well as higher beta plays.

September was a horrible month for the stock market, but now is not the time to be selling stocks. We believe a market bottom is close at hand, and this month’s “Inside The Stock Market” section presents several of our “big picture”, historical market studies to provide support for this belief.

Doug Ramsey examines the history of bank failures and prior liquidity crises (back to 1830) to demonstrate that this current financial meltdown is not unprecedented. The names have changed, but the economic and emotional responses have been loosely patterned over the entire time frame.

Building new portfolio holding in Home Improvement Retail. Our Consumer Discretionary holdings now overweight (versus S&P 500) with an 11% position our Select Industries Equity Portfolio.

While many consumer groups are seeing significant improvement in the GS Scores, careful selection is important as there are still several Discretionary groups rated Unattractive.

Dow Theorists looking at current market environment may be concluding stocks could weaken further. However, historically when confirmation from the Transports takes an excessively long time to develop (like it has currently), the technical pattern has actually provided an excellent buy signal.

We have found that technology has the strongest seasonal tendency of any sector during the market’s “bullish” seasonal period of November through April.

October brings our annual exercise in the “Playing The Bounce” strategy. This month’s “Inside The Stock Market” presents the initial run of stocks which may be subject to heavy tax loss selling. Traditionally, these stocks may be poised to “bounce” back early in the next year as selling pressure wanes.

High Yield bonds have reached our attractive zone at yields of nearly 14%. To us, a gradual accumulation program makes sense.