Green Book May 1986
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Bond Market Summary
April was a consolidation month and we think there could be weakness in the last half of May, carrying T-bonds to the 8%-8.25% level. However, we look for 7% before 1986 is over and possibly even 6%.
Caution Light Still On
The work continues to indicate the stock market should be approached with a great deal of caution. I think we must at least entertain the possibility that the cyclical bull market is in the 8th or 9th inning.
Client Questions
Here again are some of the client queries we have had over the last month.
Do Dividend Yields Mean Anything?
With the market in a growth stock atmosphere, many don’t think dividends are important, but some of us do.
Especially For New York Readers
You can miss a lot when your daily papers are the Wall Street Journal and the New York Times, papers where the only comic section is the editorial page.
Is 1986 Going to Be Another 1962?
The current 1974-1986 secular bull market period is similar to the 1949-1962 period (not 1921-29) in a number of ways. In this study, we compare earnings and dividend trends, as well as price action. If the 1949-1962 script is playing over again, the P/E expansion may be about over, with a non-economic bear market due.
Leaders & Laggers
From a sector standpoint, perhaps the most notable development of the past thirty days was the strong action of many smaller technology stocks. This strong relative performance has also carried over into the first few days of May.
View from the North Country
The Case for Australian Government Bonds: On a relative basis, these bonds look better to us today than in August of 1985. The Real Estate Game: The real estate glut has now spread across almost all of the nation. Still, a number of pension funds and insurance companies continue to put up more buildings. Does this really make investment sense?
Table of Contents
Stock Market
- View from the North Country
- Caution Light Still On
- Leaders & Laggers
- Client Questions
- Do Dividend Yields Mean Anything?
Of Special Interest
Macro Monitor
At Random
Bond Market Summary
April was a consolidation month and we think there could be weakness in the last half of May, carrying T-bonds to the 8%-8.25% level. However, we look for 7% before 1986 is over and possibly even 6%.
Caution Light Still On
The work continues to indicate the stock market should be approached with a great deal of caution. I think we must at least entertain the possibility that the cyclical bull market is in the 8th or 9th inning.
Client Questions
Here again are some of the client queries we have had over the last month.
Do Dividend Yields Mean Anything?
With the market in a growth stock atmosphere, many don’t think dividends are important, but some of us do.
Especially For New York Readers
You can miss a lot when your daily papers are the Wall Street Journal and the New York Times, papers where the only comic section is the editorial page.
Is 1986 Going to Be Another 1962?
The current 1974-1986 secular bull market period is similar to the 1949-1962 period (not 1921-29) in a number of ways. In this study, we compare earnings and dividend trends, as well as price action. If the 1949-1962 script is playing over again, the P/E expansion may be about over, with a non-economic bear market due.
Leaders & Laggers
From a sector standpoint, perhaps the most notable development of the past thirty days was the strong action of many smaller technology stocks. This strong relative performance has also carried over into the first few days of May.
View from the North Country
The Case for Australian Government Bonds: On a relative basis, these bonds look better to us today than in August of 1985. The Real Estate Game: The real estate glut has now spread across almost all of the nation. Still, a number of pension funds and insurance companies continue to put up more buildings. Does this really make investment sense?
Stock Market
- View from the North Country
- Caution Light Still On
- Leaders & Laggers
- Client Questions
- Do Dividend Yields Mean Anything?
Of Special Interest
Macro Monitor
At Random
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