Valuations
Reprint Of Early April Conference Call
Special reprint of Steve Leuthold, Byron Wien and Charley Maxwell conference call from early April.
Volatility 2000 Continues
Modifications to Major Trend Index improve reading, but MTI is still very negative.
View From The North Country
Workers’ stock market purchasing power at all time low. Also, a book out of the past, has an eerie ring to it.
Time To Shift Into Mid Caps?
Advise clients mandated to be fully invested to move assets away from Large Cap institutional favorites and into Mid/Small cap names.
Making The Case For Mid Caps
For managers who are mandated to stay fully invested, Mid Caps make pretty good sense as a replacement for extremely overvalued Nifty Fifty stocks.
View From The North Country
Transcript from late February conference call with Steve Leuthold and Byron Wien covering a wide spectrum of timely investment topics.
October: Who Woulda Thought…
The evils of October vanished after the first six trading days. Small can stocks cheap relative to large caps but not cheap relative to their own history.
Major Stock Market Positives and Negatives
Steve’s personal judgements and opinions incorporating observations, experience and gut feelings, going beyond the quantitative aspects of the Major Trend Index disciplines.
Is 1998 Like 1987?
Comparing 1987 versus 1997 and 1998 Advance/Decline lines: 1987’s actually didn’t look nearly as bad as today’s.
Should We Believe It This Time?
On June 22, clients received an Interim Memo noting that our composite Major Trend Index had slipped to Negative status. The subsequent calculation lost a few more points and remains marginally negative.
Valuations in Low Inflation Environments
Low inflation environments versus “new era” valuations. Examining low inflation environments only, with our “Upside/Downside” factors, there is still 34%+ downside to median valuation levels (1957 to date).
Trying To Rationalize Today’s Stock Market Valuations
Bullish conclusions using today’s low inflation levels and today’s “low” bond yields are derived from very short-term, historical time horizons. Longer term studies do not support these conclusions.
What I Worry About
Today’s great bull market has broken most past behavioral guidelines and precedents. It’s a different animal and could terminate as most manias do...with little forewarning and a waterfall decline.
Major Trend Index is Neutral
The strong and broad May stock market moved the multi-factor Major Trend Index discipline up from Negative to Neutral status.
Worth Noting and Quoting
Reasonable valuations(?), risk reductions and the wealth effect.
In “Never Never Land”
It’s “Never Never Land”...stock market now above all past valuation extremes. Ultimately, a big bear market is out there, but shorter term it may go higher.
A Major Market Top in the Making
Since turning negative on July 2, the Major Trend Index has deteriorated very rapidly. Major stock market top now seems to be developing. There are now five stock market positives and seven negatives.
Technology: Historical P/E Comparisons
Andy Engel’s new “broad” Technology Composite, an all-inclusive representative tech group and Jim Floyd’s “Super Tech” sector, comprised of internet, communications and networking companies.
Summary View
U.S. market in a temporary new valuation era and reminiscent of last leg up in Tokyo stock market in late eighties. Driving force has been the public’s belief that you “can’t lose” with equity fund shares.
Major Stock Market Positives and Negatives
A review of the significant stock market positives and negatives as I currently see them. There are now five major positives and five major negatives.
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