Green Book September 1998
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Featured Articles
August Mutual Fund Flows
Weekly inflows for the month of August were positive in the early part of the month, but quickly turned to net redemptions as the market fell. The data demonstrates that investors continue to buy on strength. They don’t buy the dips!
August Was Terrible
August’s decline was the largest monthly decline since October 1987. Recommended Client Strategy: maintain most defensive equity stance available - if cash is not an option, concentrate in defensive equity sectors.
Bargain Basement Investing...Asia and Emerging Markets
Most investors, including professionals, find it emotionally difficult to act independently and contrarian. It is emotionally comforting to be in tune with the consensus....after all, going with the consensus won’t get you fired.
Day To Day Stock Market Volatility
Amazingly, nine of twenty one trading days in August were high volatility days (1% or greater move).
Inside the Bond Market
T-bond ahead of itself, fueled by flight to credit quality...Yields could back up should Asia outlook improve, or equity market rally significantly.
Insider Block Measures...An Update
As of the latest reading (week ending August 31), the normalized 10-week average was back into extreme net selling territory.
Joke of the Month
Overall, joke flow was very poor in August. I suspect vacation time and the depressing stock market were significant factors.
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.
Out of Synch
Unless earnings begin to show strong signs of growth (not evident at present), the stock market is clearly still ahead of itself (even after the August decline).
Scanning the Markets
S&P 500 and DJIA down 15% in August, but outperformed 75% of 84 sectors.
Smaller Caps Could Now Be Less Vulnerable Than Larger Caps
Smaller can managers are expected to see better times ahead. We predict that the next bull market will be led by small cap stocks. Historically, small caps now look fairly priced.
View From the North Country
Bear market or steep correction? Rising inflation could actually be good for equity market over next few years. FASB arrives at a decision which could spell the end to the repricing options practice by making it prohibitively expensive.
Table of Contents
Stock Market
- August Was Terrible
- Major Stock Market Positives and Negatives
- Smaller Caps Could Now Be Less Vulnerable Than Larger Caps
- Insider Block Measures...An Update
- August Mutual Fund Flows
- Day To Day Stock Market Volatility
- Out of Synch
- View From the North Country
Of Special Interest
Macro Monitor
Equity Strategies
At Random
August Mutual Fund Flows
Weekly inflows for the month of August were positive in the early part of the month, but quickly turned to net redemptions as the market fell. The data demonstrates that investors continue to buy on strength. They don’t buy the dips!
August Was Terrible
August’s decline was the largest monthly decline since October 1987. Recommended Client Strategy: maintain most defensive equity stance available - if cash is not an option, concentrate in defensive equity sectors.
Bargain Basement Investing...Asia and Emerging Markets
Most investors, including professionals, find it emotionally difficult to act independently and contrarian. It is emotionally comforting to be in tune with the consensus....after all, going with the consensus won’t get you fired.
Day To Day Stock Market Volatility
Amazingly, nine of twenty one trading days in August were high volatility days (1% or greater move).
Inside the Bond Market
T-bond ahead of itself, fueled by flight to credit quality...Yields could back up should Asia outlook improve, or equity market rally significantly.
Insider Block Measures...An Update
As of the latest reading (week ending August 31), the normalized 10-week average was back into extreme net selling territory.
Joke of the Month
Overall, joke flow was very poor in August. I suspect vacation time and the depressing stock market were significant factors.
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.
Out of Synch
Unless earnings begin to show strong signs of growth (not evident at present), the stock market is clearly still ahead of itself (even after the August decline).
Scanning the Markets
S&P 500 and DJIA down 15% in August, but outperformed 75% of 84 sectors.
Smaller Caps Could Now Be Less Vulnerable Than Larger Caps
Smaller can managers are expected to see better times ahead. We predict that the next bull market will be led by small cap stocks. Historically, small caps now look fairly priced.
View From the North Country
Bear market or steep correction? Rising inflation could actually be good for equity market over next few years. FASB arrives at a decision which could spell the end to the repricing options practice by making it prohibitively expensive.
Stock Market
- August Was Terrible
- Major Stock Market Positives and Negatives
- Smaller Caps Could Now Be Less Vulnerable Than Larger Caps
- Insider Block Measures...An Update
- August Mutual Fund Flows
- Day To Day Stock Market Volatility
- Out of Synch
- View From the North Country
Of Special Interest
Macro Monitor
Equity Strategies
At Random
Perception for the Professional
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