Green Book December 1986
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Featured Articles
Benchmarks......Intrinsic Value
Today’s normalized P/E multiple is close to the high quartile, with dividend yields in the low decile and book value ratios close to their high decile. The cash flow ratio is about at its historical median, but other benchmarks demonstrate the stock market’s potential downside vulnerability.
Bond Market Summary
Having been a super bull on the bond market since 1981, this publication has turned more cautious. A number of readers have asked for details and elaboration. Today we still view the bond market trend as up, but think a sharp decline might occur sometime in 1987, with T-bond yields rising by as much as 300 basis points.
Inflation/Deflation and the Stock Market
Today, many are concerned about the potential negative impact of deflation and the stock market. Our work demonstrates that moderate deflation has typically not been a hostile stock market environment. However, deep deflation (5%-11%) has historically been a bad time for stocks.
Inside the Stock Market
The Major Trend Index deteriorated some and remains negative, as it has since mid-June. Major cyclical bull market top in progress. Shorter term work (Early Warning Index) rendered a “sell” signal on Nov. 21, after giving a “buy” signal on Sept. 15. The Bears may have Christmas.
Joke of the Month
This month’s selection came from Chicago, the FAF Conference back in June. I think I heard it from Parker Hall.
November Equity Cross Currents
For the most part, the market’s leading and lagging sectors were a continuation of October’s trends. Quality Growth did well, while deep cyclicals, inflation sensitive issues and financials lagged. Again, we suspect the derivatives had some impact, as big capitalization, heavy weight growth issues typically performed well.
Oil Patch Update
We continue to believe the Japanese Oil Patch invasion will develop and the sector continues to look oversold and cheap, with most institutions significantly underweighted. Larry Jeddeloh spent part of November on the west coast, combining a research trip with some client visits. Here are his observations.
Thoughts About Leadership Technology and IBM
We may have to wait for a while to see the next major cyclical surge in the secular bull market born in 1974, but when it gets underway we think the Technology sector will probably lead.
View from the North Country
Happy Holidays……Japan International Banking……Remember, patience is a virtue if you want to buy a farm.
Table of Contents
Stock Market
- View from the North Country
- Inside the Stock Market
- Thoughts About Leadership Technology and IBM
- Oil Patch Update
- Inflation/Deflation and the Stock Market
Of Special Interest
Macro Monitor
Equity Strategies
At Random
Benchmarks......Intrinsic Value
Today’s normalized P/E multiple is close to the high quartile, with dividend yields in the low decile and book value ratios close to their high decile. The cash flow ratio is about at its historical median, but other benchmarks demonstrate the stock market’s potential downside vulnerability.
Bond Market Summary
Having been a super bull on the bond market since 1981, this publication has turned more cautious. A number of readers have asked for details and elaboration. Today we still view the bond market trend as up, but think a sharp decline might occur sometime in 1987, with T-bond yields rising by as much as 300 basis points.
Inflation/Deflation and the Stock Market
Today, many are concerned about the potential negative impact of deflation and the stock market. Our work demonstrates that moderate deflation has typically not been a hostile stock market environment. However, deep deflation (5%-11%) has historically been a bad time for stocks.
Inside the Stock Market
The Major Trend Index deteriorated some and remains negative, as it has since mid-June. Major cyclical bull market top in progress. Shorter term work (Early Warning Index) rendered a “sell” signal on Nov. 21, after giving a “buy” signal on Sept. 15. The Bears may have Christmas.
Joke of the Month
This month’s selection came from Chicago, the FAF Conference back in June. I think I heard it from Parker Hall.
November Equity Cross Currents
For the most part, the market’s leading and lagging sectors were a continuation of October’s trends. Quality Growth did well, while deep cyclicals, inflation sensitive issues and financials lagged. Again, we suspect the derivatives had some impact, as big capitalization, heavy weight growth issues typically performed well.
Oil Patch Update
We continue to believe the Japanese Oil Patch invasion will develop and the sector continues to look oversold and cheap, with most institutions significantly underweighted. Larry Jeddeloh spent part of November on the west coast, combining a research trip with some client visits. Here are his observations.
Thoughts About Leadership Technology and IBM
We may have to wait for a while to see the next major cyclical surge in the secular bull market born in 1974, but when it gets underway we think the Technology sector will probably lead.
View from the North Country
Happy Holidays……Japan International Banking……Remember, patience is a virtue if you want to buy a farm.
Stock Market
- View from the North Country
- Inside the Stock Market
- Thoughts About Leadership Technology and IBM
- Oil Patch Update
- Inflation/Deflation and the Stock Market
Of Special Interest
Macro Monitor
Equity Strategies
At Random
Perception for the Professional
March 2026 Issue
Featured Articles
Sector Navigator
March 2026 Issue
