Latest Research

Earnings normalization of some type is essential when making historical relative P/E comparisons. The more cyclical the earnings of a market index (or an individual company) the more important normalizing or smoothing becomes.

Soft Landing? Better fasten your seat belts...the odds are against it. Is the sun setting on the U.S. dollar as a world reserve currency? Also, how gold is still disappointing its fans and a look at one of the ways your Social Security tax is spent.

The tidal wave of equity mutual fund cash flows continues to roll in. “Cash” percentage in growth oriented equity funds hit a 12-year low. New equity supply may now about match mutual fund cash inflows. Cart or horse? Do the mutual fund cash flows drive the market or does the market drive them?

Weight of the evidence bond market Major Trend still negative this month. Weak dollar, commodity inflation warnings, combined with diminishing investor demand helped to keep our Index in negative territory.

Evaluating relative sector attractiveness and an explanation of the factors incorporated in our Sector Selection Scores, a multi-factored disciple incorporating 28 elements to aid in strategic sector decision making.

Should we just own stocks and forget about asset allocation? After all stocks have been the best performing asset class over the last 70 years.

Reducing equities below normal minimum for the first time since the summer of 1987. Intrinsic Value work is now quite overvalued and approaching 1987 peak valuations. However, a 1987 type crash is not expected.

The stock market continued to show strength during March, with the DJIA turning in a 3.7% gain while the S&P 500 rose 2.7%.

The best and worst equity sector performers for March.

The Leuthold Group’s new direction in stock sector selection. A disciplined, unemotional, quantitative approach to today’s “real world” stock market group selection.

While the aggregate flow to mutual funds continues to be a net inflow, it is down substantially from year ago levels and some types of funds have been seeing net outflows.

Weight of the evidence bond market discipline shifted to negative from neutral this month.

Greenspan's comments about the possibility of lower short term rates and orchestrating a soft landing ignited the bond market and stocks followed suit, with several market indices hitting new highs.

In late February, the stock market moved to new highs. The DJIA broke above its 4000 barrier on a 4.4% gain for the month, while the S&P 500 rose 3.6%. Only four of our 61 groups turned in negative performance during February.

Equity offerings have picked up somewhat, but so has the flow into mutual funds. Supply/Demand still seems in reasonable balance.

How strong is the underlying market? An update on investor psychology and a look at the DJIA psychological barriers. The Leuthold Group’s February Polling the Pros results.

Earnings momentum may be peaking. The economy should slow by mid-1995, but analysts may not be factoring this into estimates. Also, year over year comparisons will be tougher as 1994's big earnings numbers get factored in.

The incentive system from hell: Adjusted for inflation, we now spend nine times as much on welfare as when the War on Poverty began in 1965. Also, an interesting study by Collins Associates: Past performance is not a reliable prediction of future performance and, in fact, is a poor predictor of future results.

Bond market now ahead of itself...Economy stronger than many perceive...Fed may not be done tightening...Expect bond market correction to develop from overbought position sometime in March.

Our studies suggest we still have some further regression before returning to median returns. Looking out to a 3-5 year horizon, we expect equity returns to lag historical averages as returns regress further toward normal long term (10 year) performance.