Latest Research

Jim Floyd is boosting his 12 month interest rate targets by about 50 basis points across the board. The economy is expected to be showing signs of recovery by year end 2009, and the credit markets are thawing.

Valuation metrics using S&P 500 aggregate earnings can be skewed by large losses. Building a profile of valuations by looking at median valuations, or the distribution of valuations, can be helpful to avoid this problem.

Superior performance of foreign stocks of late is likely only the preamble to what the rest of the cyclical bull market will look like.

There are two important conclusions about the historical relationship of stock vs. bond returns:

1. The current stocks vs. bonds performance differential, over both very short and very long time periods, is at or near historical extremes in every timeframe we examined. This suggests that we are at the threshold of a major (but temporary) market anomaly.
2. Historically, periods when bonds have outperformed stocks over very long timeframes have proven to be very opportune times to shift out of fixed income assets and into equities.

Despite the recent rally, the best two month move since 1933, investors migrating back to bearish camp. This is the best defined “wall of worry” we have seen in over a decade, and one that will provide more fuel for what we believe is a cyclical bull market.

Establishing new portfolio holding in Oil & Gas Drillers, which brings exposure up near market weight in Energy sector.

So, over the long run, stocks are supposed to provide better returns than bonds as compensation for taking greater risk. Well the last 20, 30, and 40 year periods show that bond and stock returns have been at the smallest performance spreads ever. In some cases, bonds actually produced better returns. It’s pretty depressing huh?

A look at the perils with Chinese A Shares. Concern has been raised about China A Shares because they are seeing significant increases in their share float, due to government releasing restricted shares to the public.

Several independent methods are presented that seem to triangulate on the years 2012 and 2013 as candidates for another significant stock market low  - - maybe the final low of a secular bear market which began in 2000?

The “Fail-Safe” mechanism was removed in mid-March, after market action moved above the re-entry point.

Looking for reasons to own more stocks? Doug Ramsey has a whole bunch of them.

We’ve been receiving a lot of client questions on normalizing earnings. We take a look at a “Bottom Up” approach and give a simplistic description of our approach.

Dividends have been garnering a lot of attention of late. We provide a list of S&P 500 constituent dividend changes and examine the implications of dividend cuts from an historical perspective.

Have analysts blown through reality and swung too far, paving the road for upside surprises?

If the November lows in the Homebuilders holds, based on the leading relationship between stocks and starts, an upturn in housing starts (not the broader economy) should be imminent.

REITs were at one time a market darling, and for the first three quarters of 2008 they were holding up much better than the stock market.

The “Fail-Safe” was triggered by the poor market action at the end of February, and we are moving towards a 50% net equity exposure. Caution seems prudent despite the Major Trend Index remaining in positive territory.

Extrapolate the current state of affairs into the future at your own risk - “normalcy” is bound to return at some point.

Fed policy in the current crisis has been far more aggressive than at a comparable point in either the Great Depression or in Japan’s “Lost Decade.”

Credit spreads have blown out to levels not seen since the 1930’s. What are the implications for the market?