Latest Research

Steve’s assessment of the current bullish and bearish factors. Also, Leuthold’s recent discussion of secular bear markets, sparked some debate among readers.

Rationale For “Small Group” Equity Portfolio Holding

A new component in new “Small Group” holding within Select Industries.

A new component within Select Industries “Small Group” holding.

Performance of the Select Industries Portfolio was very impressive during November (+10.7%), and easily outperformed the S&P 500 (+4.0%).

Estimated year end profit margins are expected to be at 7.4%, the highest level dating back to at least 1955.

Jim Floyd devotes several pages of “Inside The Stock Market” to answer client questions. Included are questions about reported versus operating earning, the impact of inflation on small cap stocks, and our rationale behind our interest rate target among others.

The January effect still lives…..it just comes a month earlier in December.

Historically, the first few increases do not have an adverse impact on the stock market on a longer term basis (6 to 12 months). However, stocks do tend to take a hit after the fourth or fifth rate hike on a 6 to 12 month time horizon.

These stocks began bouncing in October…..significantly outperforming the S&P 500 and also beating the NASDAQ’s 4.1% October gain.

Small cap stocks continue to be market leaders in November. Our small cap leadership model had a slight improvement, but is still neutral. On a valuation basis, small caps are no longer attractive, but they still look good on a momentum basis.

Equity funds with a domestic focus made a big comeback in November, posting the largest monthly net inflow since last February. In fact, more money came in during November alone than in the previous four months combined.

Metals stocks quickly made back October’s losses, and more, during the November rally.  

Deficit narrowing. Last three months’ (including first month of fiscal 2005) receipts remarkably strong, while outlays have declined.

Main Street’s rush into international stock funds could be foreshadowing tougher times ahead for foreign markets.

An in depth discussion of market sentiment...At present, it is a real mixed bag, there is no clear cut consensus.

Majority of this year’s “Playing The Bounce” list are Tech related names, re-enforcing our belief that the Tech stocks will continue to outperform on a tactical basis.

An analysis comparing S&P 500 performance for the current election year to the performance averages of all election cycles since 1944.

We have been proponents of Small Cap stocks since the beginning of the bear market. However, we may be approaching a transition to Large Cap leadership.

An answer to some questions regarding the large cap focus of our early August 2004, Aerospace & Defense group purchase.