Green Book February 2008
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Featured Articles
U.S. Inflation May Be Peaking
CPI and PPI expected to peak in early 2008 and then decelerate. Our initial 2008 predictions are +3.5% for CPI and +4.0% for the PPI by year end...That’s the good news.
Correction Or Bear Market? Looks To Us Like New Cyclical Bear
An update of our study on past bear markets, showing typical peak to trough declines in the popular market averages and the duration of these declines. Also look at past bear market rallies.
Do You Believe In "Decoupling"
A popular buzz word in recent months is “decoupling”, often used in building a case for investing in fast growing foreign stock markets even though the U.S. economy is entering a phase of minimal economic growth or recession.
Historical Sentiment Measures Not Showing Signs Of Bottom
In looking at Contrarian indicators compared to past major market lows, it seems today’s market has more room on the downside.
Inflation Understated Not Overstated
We believe that the CPI understates, not overstates inflation. There is political pressure to keep inflation low.
Initiating Coverage Of Nuclear Power Thematic Group
“Of Special Interest” highlights an upcoming study which will introduce our new Nuclear Power thematic group. The study will present both Domestic and Global alternatives for playing this theme.
January 2008 Market Action
To the extent that the January Barometer can still be trusted—and in judging its recent track record, it certainly can’t—the losses in January provide a foreboding message for the bulls in early 2008.
Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
We did get a bounce stock rally in January, but it still was a disappointing bounce year overall.
The Big January Surprise
Major Trend Index remains Negative; assume the cyclical bear market prevails, but we increased net equity exposure. Why?
The Economy And The Stock Market
The stock market tends to peak out 6-12 months prior to recession but turns back up prior to the end of a recession.
The Historical Significance Of Median P/E Valuations
70% of all the market declines since 1945 (post WWII), bottomed within 10% of the median historical normalized P/E ratio.
U.S. Economy Skirts Recession In Q4, Or Does It?
It now appears that the downward bias in inflationary pressures suggested by the CPI data is tame compared to the GDP Deflator. And if this is true, investors may be operating under a false sense of security that economic growth remains positive (albeit ever so slight).
Table of Contents
Stock Market
- The Big January Surprise
- The Economy And The Stock Market
- The Historical Significance Of Median P/E Valuations
- Do You Believe In "Decoupling"
- January 2008 Market Action
- Correction Or Bear Market? Looks To Us Like New Cyclical Bear
- U.S. Economy Skirts Recession In Q4, Or Does It?
- Historical Sentiment Measures Not Showing Signs Of Bottom
- Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
Of Special Interest
Macro Monitor
Inflation Watch
U.S. Inflation May Be Peaking
CPI and PPI expected to peak in early 2008 and then decelerate. Our initial 2008 predictions are +3.5% for CPI and +4.0% for the PPI by year end...That’s the good news.
Correction Or Bear Market? Looks To Us Like New Cyclical Bear
An update of our study on past bear markets, showing typical peak to trough declines in the popular market averages and the duration of these declines. Also look at past bear market rallies.
Do You Believe In "Decoupling"
A popular buzz word in recent months is “decoupling”, often used in building a case for investing in fast growing foreign stock markets even though the U.S. economy is entering a phase of minimal economic growth or recession.
Historical Sentiment Measures Not Showing Signs Of Bottom
In looking at Contrarian indicators compared to past major market lows, it seems today’s market has more room on the downside.
Inflation Understated Not Overstated
We believe that the CPI understates, not overstates inflation. There is political pressure to keep inflation low.
Initiating Coverage Of Nuclear Power Thematic Group
“Of Special Interest” highlights an upcoming study which will introduce our new Nuclear Power thematic group. The study will present both Domestic and Global alternatives for playing this theme.
January 2008 Market Action
To the extent that the January Barometer can still be trusted—and in judging its recent track record, it certainly can’t—the losses in January provide a foreboding message for the bulls in early 2008.
Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
We did get a bounce stock rally in January, but it still was a disappointing bounce year overall.
The Big January Surprise
Major Trend Index remains Negative; assume the cyclical bear market prevails, but we increased net equity exposure. Why?
The Economy And The Stock Market
The stock market tends to peak out 6-12 months prior to recession but turns back up prior to the end of a recession.
The Historical Significance Of Median P/E Valuations
70% of all the market declines since 1945 (post WWII), bottomed within 10% of the median historical normalized P/E ratio.
U.S. Economy Skirts Recession In Q4, Or Does It?
It now appears that the downward bias in inflationary pressures suggested by the CPI data is tame compared to the GDP Deflator. And if this is true, investors may be operating under a false sense of security that economic growth remains positive (albeit ever so slight).
Stock Market
- The Big January Surprise
- The Economy And The Stock Market
- The Historical Significance Of Median P/E Valuations
- Do You Believe In "Decoupling"
- January 2008 Market Action
- Correction Or Bear Market? Looks To Us Like New Cyclical Bear
- U.S. Economy Skirts Recession In Q4, Or Does It?
- Historical Sentiment Measures Not Showing Signs Of Bottom
- Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
Of Special Interest
Macro Monitor
Inflation Watch
Perception for the Professional
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