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The 1987-89 bull market game is not over according to our work, but indications are that it’s in the 8th or 9th inning. In the coming months, as “soft landing” and “fly by” thinking shifts to “recession thinking”, the stock market could get pretty nasty.

This may be just the type of stock that is appropriate for the late stages of a business expansion. We would expect these investments to hold up pretty well in a down market. In other words, this sector looks to be “defensive”.

A performance run down for our equity market sectors ranked by 3rd Quarter performance. All screen based Quantitative Themes are included, both active and experimental.

It still appears to be premature, but we are giving serious consideration to adding a package of selected high yield corporate bonds to the fixed income component of the two asset allocation models.

A lackluster T-bond rally in the first half of September seemed to be primarily a flee to quality as junk bonds were trashed. Then in the last week or so T-bonds have moved lower, even as the junk market stabilized.

In terms of stock screening, companies selling far below book value raise a red flag and deserve very close critical scrutiny. However, when book value is used in combination with other value considerations it can be helpful in recognizing undervalued stocks.

In Memory of Ken Smilen...Unreal estate...New Zealand and Australian Market Update...Japanese Market and Copper

In August, as the “fly by” thesis went to the top of Wall Street’s popularity charts, the big cyclicals gained a new lease on life.

The 1987-89 bull market game is not over according to our work but indications are it’s in the 8th or 9th inning. In the coming months, as “soft landing” and “fly by” thinking shifts to “recession thinking”, the stock market could get pretty nasty.

We view this new holding in “North American Golds” as a tactical play, more or less of a defensive move in a stock market that appears increasingly vulnerable. But it could end up being much more than that if real trouble or turmoil lies ahead.

A performance run down for our equity market sectors ranked by August performance. All screen based Quantitative Themes are included, both active and experimental.

Making relative value judgements for cyclicals on a P/E basis can be tricky. These stocks often look the cheapest when they should be sold and look the most expensive when they should be bought.

Are we going to see a “soft landing”, a “fly by”, or a recession? This work may ultimately provide some clues.

In August, the dollar was strong and inflation fears continued to wane. So why were most long-term bonds down 2-4 points? We can blame the economy, or at least Wall Street’s perception of the economy.

Recessions And Soft Landings....Why Stocks Have Moved Higher....New Zealand And Australia Update

Wall Street pulled down the caution flags a few months ago. Correction became the consensus. But it wasn’t to be. All those newly converted late arriving bulls who were planning to add stocks on a 7%-10% correction never got their chance to put the cash to work.

July was a very big month for the popular averages, with the DJIA up 9.0% and the S&P 500 up 8.8%. The big action was in big cap issues, with high quality growth issues featured (especially drugs).

Last month Dean Witter announced they were getting out of the program trading business. Maybe some other big retail oriented brokerage firms will follow suit. A blowout day on the downside may be all that is needed.

An increasing number of brokers and institutions are focusing on “Ecology Technology”. On a global basis, environmental problems are being recognized and increasing amounts of public money is being dedicated to addressing these problems.

Clients are asking how much more is in this market? Herein we will attempt to provide an answer to this question, without the aid of charts, astrology, or Evel Knutson. Rather, we will employ over 60 years of historical valuation facts.