Latest Research

Fixed income hedge in portfolios was reduced by one-half in mid-August following the spike in bond yields. TIPS for fixed income investors?…..You can lose money on Treasury Inflation Protected Securities (TIPS). You are protected against inflation but not sharp rise in interest rates.

GDP growth of +4.0% projected for 2003. But, fast growing U.S. budget deficit is a significant problem for bonds.

VIX Index not effective as a sell signal, but very good on buy side. Ignore talk of current low VIX reading foreshadowing a market decline.

Still overweight Info Tech, but stock selection likely to get tougher in coming months.

Stage is set for market’s next advance, breaking out of its two month consolidation.

Continue to position our portfolios to take advantage of the current updraft in the U.S. stock market. Economic results and earnings reports continue to surprise on the upside.

Equity group leadership in 2003…..Top twenty group performance leaders have heavy tech concentration. Health Care also well represented.

We still have been unable to get a satisfactory explanation from Standard & Poor’s of why and how they revised their Book Value calculation. The revisions were huge and had a significant impact on our valuation metrics.

In early August, the Unconventional Portfolio is establishing a new equity holding in the Unregulated Power Producers.

A brief recap of our reasons for a bullish outlook on Japan’s stock market.

Main Street’s unexpected return to Wall Street. July marks fifth consecutive month of net inflows, now totaling nearly $60 billion YTD.

In 2003, the NASDAQ has not been as volatile as in recent years, but is still more volatile than the S&P 500.

Despite the recent rise in net selling over the past 5 months, we still view recent buy signals in Q4-2002 and Q1-2003 as bullish for the stock market.

Both the NYSE and NASDAQ short interest ratios saw increases in July.

The equity market resumed its strong performance in July.

High Yield bonds rated marginally attractive after continued spread narrowing.

Investor preference toward bond funds, chasing performance, may be left behind once again. Bonds not expected to generate very good returns from current levels based on historical analysis of returns.

The broad Tech sector has rallied significantly from lows and is not cheap by traditional measures.

Economy will pick up steam in the second half, sustaining the already in progress earnings recovery. Also, Cyclical rally targets and equity leadership going into the second half.

Unexpectedly, it seems that the public is coming back to the stock market. Best flow since May 2002. Typically, Main Street takes its time coming back to the party. Continued flow to mutual funds is stock market positive.