Latest Research

Spring has come to Minnesota (kind of) and The Leuthold Group finds it has made some errors in one of its historic inflation charts. A corrected version in included.

Federal debt and its close relationship to inflation is tracked from 1791 to date. Clearly the two are intertwined. Unless some fiscal sanity prevails in Washington, the nation may be in a hyperinflationary mode before the decade is past, regardless of the current cyclical downtrend.

The stock market is in the process of making a cyclical bear market low. The Early Warning Index for market bottoms has turned Positive. The Major Trend Index is Neutral. It is time to start buying stocks again with cash reserves but hold long bond positions for now.

Energy market weight now down to 20%, from 32% in late 1980. Historic weighting has been 17%. The worst part of the “round trip” may be close to over. Good rally expected in the next 90 days, but new long-term leadership is not in the cards.

This conceptual area, even though now widely recognized, still looks attractive. We may soon again be increasing holdings here from current 10% levels. With this issue, we have refined our approach, separating Science & Technology Productivity Plays from Non-Science & Technology. The S&T components may be most attractive. A new index is introduced to track this segment more closely.

The weather is awful here. Who has more brains, ducks that fly south or Minnesotans who stay home?

Does it pay to buy companies Wall Street widely recognizes as having good management? Probably Not! This study examines 45 companies which over the last ten years have received the “best managed” accolade. What happened, to their earnings, dividends and the stock prices after being anointed “best managed”?

The stock market may be on the verge of 1982’s best buying opportunity, even though for the time being the caution light is on. Early Warning Index and Major Trend Index both Neutral now and 750-780 may be just around the corner, and, a “surprise” financial shock may no longer be a surprise.

A distribution by traditional economic sectors of groups ranked “very good” or higher. We think this provides a good fix on current market leadership areas, as well as providing clues as to future areas of leadership.

Did you see Mike Blumenthal’s article, “What Ronald Reagan can learn from Jimmy Carter”? If not, read this brief synopsis. Advises RR to adjust economic program quickly and decisively to new conditions. Don’t hang tough, then retreat step by step. Changing course is not politically wrong.

Tradition calls for predictions and prognostications this time of year. Some call it thermal pollution time. This ritual is, however, a relatively harmless practice, just so long as investors do not take it too seriously.

Still a super cycle bull market, but cyclical uptrend in question. Major Trend Index still positive but has slipped badly. Early Warning Index turned Negative Dec. 21…Caution!

Does it pay to buy last year’s winners? Not usually. 1981’s best and worst performers reviewed, with an update of what happened to 1980’s best and worst in 1981.