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A performance rundown for our equity market sectors and other measures ranked by November performance (75% of our sectors beat the S&P 500).

Secondary stock measures were up 7%-9% in November compared to 5%-6% for the capitalization weighted measures. All we can say is, it’s about time!

If you have major positions in the select list of 1990 “Hero” stocks (those big growth names that are up on the year), when should you start trimming back (if ever)? When should you start looking at cyclicals (if ever)? When should you start looking at cheap value stocks (if ever)?

West Coast Client Trip...Remembering Henri de La Chapelle...Twin Cities Presentation of “Other People's Money”... Comparing Large Firms Earnings Growth with Small Firms

An updated list of trading stocks to buy in November-December and sell in January or February. This strategy is not appropriate for most institutions. However, we think it can make sense for your personal accounts.....Happy Bouncing and Happy Holidays To All Of You!

In November, recession evidence continued to build. War fears started to fade. November 17 came and went, and the Bush hawk began his molt. The dollar stabilized, at least momentarily. Inflation fears faded, as oil prices traded down. In this environment, the bond market marched steadily upward all month.

So we made it through October without taking a big stock market hit. The popular stock market measures ended the month about where they started, enough to reduce investor pessimism levels by a few degrees, maybe more.

This issue marks the first anniversary of the most recent Major Trend Index sell signal, transmitted to clients on Halloween 1989. Here in October 1990, this work has improved significantly from a month ago.

A performance rundown for our equity market sectors and other measures ranked by October performance (only 31% of our sectors beat the DJIA).

The two most common questions we hear from equity only managers are: “When (if ever) should we start buying secondary stocks?” and “When do you expect a market leadership shift to the cyclicals?”

Congressional Deficit Reduction Follies: The ultimate result was a cruel joke, with no meaningful spending restraints and a hodgepodge of new taxes, apparently ripe with special interest favors. Yes, it is business as usual in Washington.

For over 10 years, The Leuthold Group has been sending out a list of year end trading suggestions. In November and December we go “bottom fishing” for stocks that are overextended on the downside. When year-end selling pressures lift, these selected Issues typically rebound nicely Into January or even February.

Crude prices fell 11% in October and almost all other commodities moved lower, easing recent inflation fears. The economic numbers mostly continued to say recession, with the exception of the new GNP number. However, very few believe the accuracy of the number.

If you thought the third quarter of 1990 was bad in the U.S. stock market, think of those poor fellas in Tokyo. Of course if your universe is secondary stocks, it was worse than that.

Cyclical bear markets typically decline 25%-30%. In terms of amplitude, the bear market could be more than half over…if it’s a typical bear.

A performance rundown for our equity market sectors and other measures ranked by third quarter performance (only three of our sectors were up).

Secondary stocks were down a big 9%-10% in September compared to 5%-6% declines for the capitalization weighted measures. Year to date, secondary stocks are down twice as much as the cap weighted measures.

Stocks are now in the high 40%-45% of the historical valuation distribution range. This is not cheap, but neither is it expensive. Based on our Benchmarks work, it now appears we can expect average performance for the stock market from today’s levels over 1, 3 and 10 year time horizons.

In examining various consumer and producer price measures going back for as long as 1000 years, it was found that prices have risen about 60% of the time and fallen about 40% of the time in the Western world.

The recent “surprise” downward revision in quarterly real GNP growth served to drive the majority of investment professionals and economists from the “no recession” camp. Also, Junk Mail Busters and Ken Safian lives!