Green Book August 2012
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Featured Articles
A Look At Thematic And Sector Valuations
Health Care and Consumer Staples valuations don’t look as dangerous as widely assumed. Utilities look expensive; conversely, the big corrections in the Industrials and Materials sectors have yet to create truly compelling valuations. The best sector for contrarians is Energy.
An “Oversold” Market Turns Up
VLT Momentum fired long-term BUY signals at the end of July on the Russell 2000, MSCI World Index and EAFE - and more signals could be coming…
Big Pharma & The Rise Of Branded Generics
A number of pharmaceutical giants are diversifying their business endeavors to offset increasing risks. Some are branching into the world of branded generics—generic drugs with recognizable brand names.
Fishing Expedition: European Stocks/Non-European Exposure
Most investors don’t like to swim in shark-infested waters, but our screen may make it more comfortable for some to consider getting back in.
Hotels & Leisure—Buy Asset-Light Hotels
We recommend buying the asset-light, cash flow-rich hotel operators within the group.
Impressive Factor Performance In July
On a performance spread basis, most of the factor categories we monitor worked as intended during July.
Inflation Pressures Trend Lower
Inflation measures mostly matched expectations in June.
Lowered Expectations — Policy Effectiveness
For central bank policy effectiveness, global economic growth, interest rates, and inflation. While lowered expectations are a good thing in the near term, long term return expectations for most asset classes should be lowered too.
Technical Glitches
This summer’s rally has taken stocks to the brink of another bull market high, but it has not been an all-inclusive affair. While the NYSE Daily Advance/Decline Line has remained healthy, other technical indicators have not.
The Risks Of Record Margins…
While the big S&P companies’ EPS have held up, our earnings breadth work has not held up as well. Part of this development can be traced back to February 2011’s “Point of Recognition.”
Time For A Breather
The Major Trend Index has been bullish throughout 2012, and the S&P 500 has delivered a total return of +12% through early August. Yet few managers have managed to match or exceed that benchmark, to do so, they would have had to be “fully invested and maximum defensive.”
Table of Contents
Stock Market
- Time For A Breather
- Technical Glitches
- The Risks Of Record Margins…
- An “Oversold” Market Turns Up
- Fishing Expedition: European Stocks/Non-European Exposure
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Inflation Watch
A Look At Thematic And Sector Valuations
Health Care and Consumer Staples valuations don’t look as dangerous as widely assumed. Utilities look expensive; conversely, the big corrections in the Industrials and Materials sectors have yet to create truly compelling valuations. The best sector for contrarians is Energy.
An “Oversold” Market Turns Up
VLT Momentum fired long-term BUY signals at the end of July on the Russell 2000, MSCI World Index and EAFE - and more signals could be coming…
Big Pharma & The Rise Of Branded Generics
A number of pharmaceutical giants are diversifying their business endeavors to offset increasing risks. Some are branching into the world of branded generics—generic drugs with recognizable brand names.
Fishing Expedition: European Stocks/Non-European Exposure
Most investors don’t like to swim in shark-infested waters, but our screen may make it more comfortable for some to consider getting back in.
Hotels & Leisure—Buy Asset-Light Hotels
We recommend buying the asset-light, cash flow-rich hotel operators within the group.
Impressive Factor Performance In July
On a performance spread basis, most of the factor categories we monitor worked as intended during July.
Inflation Pressures Trend Lower
Inflation measures mostly matched expectations in June.
Lowered Expectations — Policy Effectiveness
For central bank policy effectiveness, global economic growth, interest rates, and inflation. While lowered expectations are a good thing in the near term, long term return expectations for most asset classes should be lowered too.
Technical Glitches
This summer’s rally has taken stocks to the brink of another bull market high, but it has not been an all-inclusive affair. While the NYSE Daily Advance/Decline Line has remained healthy, other technical indicators have not.
The Risks Of Record Margins…
While the big S&P companies’ EPS have held up, our earnings breadth work has not held up as well. Part of this development can be traced back to February 2011’s “Point of Recognition.”
Time For A Breather
The Major Trend Index has been bullish throughout 2012, and the S&P 500 has delivered a total return of +12% through early August. Yet few managers have managed to match or exceed that benchmark, to do so, they would have had to be “fully invested and maximum defensive.”
Stock Market
- Time For A Breather
- Technical Glitches
- The Risks Of Record Margins…
- An “Oversold” Market Turns Up
- Fishing Expedition: European Stocks/Non-European Exposure
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Inflation Watch
Perception for the Professional
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