Domestic Groups
A Tale Of "The Tail That Wags The Dog"
We believe the continued strength of this seemingly ageless bull market is due in part to the weakening U.S. dollar, which impacts the real economy and financial asset returns alike.
Just A Costly Correction?
If February 11th marks a lasting low for stocks, the 2015-16 decline will go down as one of the costliest in history not to have reached bear market status.
Beware The Deceptive S&P…
At its January 20th closing low, the S&P 500’s peak-to-trough decline of –12.7% barely met our definition of a severe market correction (an S&P 500 loss of 12% to 18%). But the behavior of this particular index can be quite sinister during the final phase of a bull market—and during much of the ensuing bear.
The Bear Case: "Before And After"
Leadership: Winning Begets Winning
Many assume that stocks and industries exhibiting high price momentum suffer disproportionately during the eventual bear market. Surprisingly, the high momentum stock portfolio has suffered an average bear market loss that’s about a quarter less than that of the low momentum portfolio.
Navigating The First Rate Hike
Our current view is the lift-off will be December or later. Assuming inflation will pick up and the Fed hikes the rate by the end of 2015, stocks will perform relatively well, with international stocks a better bet than U.S. stocks.
Industry Group Dreams And Nightmares
For more than a quarter century, The Leuthold Group has tracked hypothetical industry group portfolios composed of the previous year’s “Dreams” (best performers) and “Nightmares” (worst performers). The former is a gauge of a simple, trend-following investment strategy, while the latter is a crude form of industry group “bottom-fishing.” Sticking with tradition, the following pages detail how the 2013 Dream and Nightmare portfolios faired in 2014, and we reveal which industries qualify in the Dream and Nightmare portfolios of 2014.
Select Attractive Domestic Groups
Auto Parts & Equipment, Systems Software, Life & Health Insurance and Life Sciences Tools & Services are featured this month.
Group Models: Info Tech Tops Domestic, Financials Tops Global
Both models (particularly domestic) have a number of Attractive rated Information Technology groups and no Unattractive rated Tech groups. Financials’ domination of the Global Attractive range continues.
Group Models Agree On Energy & Materials
But Information Technology rises to the top of the Domestic model, while the trend of Financials domination in the Global model remains intact.
Domestic and Global Group Models: Strong Agreement On Financials
Our Domestic Scores have five Financials groups rating Attractive; these same five industry groups are Attractive in our Global model. In total, seven Financials groups rank Attractive in the Global model, with insurance groups looking particularly Attractive.
Still Flying With Airlines
While their scores remain strong, the underlying factor strength has shifted as these stocks have soared. Our quantitative disciplines and a compelling underlying fundamental story are keeping us in flight.
Hotels & Leisure—Buy Asset-Light Hotels
We recommend buying the asset-light, cash flow-rich hotel operators within the group.
Four New Equity Group Purchases—Highlights of Quantitative and Qualitative Strengths
Substantial turnover in Select Industries Portfolio created room for several new industry group positions to be established.
The Top Line Story: Which Groups Are Improving, Which Are Deteriorating
Believe it or not, 21 of our equity groups have not yet seen a quarterly decline in revenues. Several early cycle type groups have already experienced four quarters of declining revenues, but the good news is three groups have posted rebounds in revenues as of Q1 2009.
Stimulus Spending Beneficiaries
Five groups we think are poised to benefit form the stimulus legislation.
New Select Industries Group Position– Auto Parts & Equipment
Auto Parts & Equipment has rated Attractive in seven of ten months this year, including the last two months.
Oil & Gas Drilling– New Group Addition To Select Industries Portfolio
Oil & Gas Drilling is tied for fifth in our Group Selection Scores this month and was purchased for the equity portfolio.
Health Care Groups Show Strong Improvement In March GS Scores– Buying Managed Health Care
The biggest change within the GS Scores this past month has been the strong improvement in Health Care groups. In response to this, we added to our Health Care exposure with a new group position in Managed Health Care.
Perception for the Professional
March 2026 Issue
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March 2026 Issue
