Green Book October 2014
Time For Defense - Major Trend Index Now Negative
Latest MTI calculation deteriorated to Negative (based on data for the week ended October 3rd). We expect further significant losses in the stock market near term and have cut net equity exposure in Core and Global asset allocation portfolios to 40%.
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MTI Turns NEGATIVE In Early October
Latest MTI calculation deteriorated to Negative (based on data for the week ended October 3rd). We expect further significant losses in the stock market near term and have cut net equity exposure in Core and Global asset allocation portfolios to 40%.
“Averages” Conceal Plight Of The Average Stock
September’s small S&P 500 loss of less than 2% disguised a significant breakdown in the “average stock.” In fact, the S&P 500 has been tougher to beat than at any time since the Tech Bubble.
Interest Rates & Currencies: It’s Complicated
The recent sudden strength in the dollar is mostly attributable to the divergent central bank policies. This supports a bullish dollar outlook over the medium term.
Are We Floating In Another Share Buyback Bubble?
Share repurchase activity among U.S. corporations is garnering a lot of negative attention as aggregate dollars spent on share buybacks are nearing the all-time highs last seen leading up to the financial crisis. We take a closer look at the recent activity to see if we are in for a repeat.
Small Cap Leverage—A Concern?
With the Fed mulling over a rate increase, investors may have already started to avoid companies with excess leverage. Unfortunately, Small Caps, on average, are in this camp.
Small/Mid/Large Cap - Small Caps Experience Worst Monthly Return Since May 2012
In September, the Russell 2000 index lost 6% and is down 4.4% YTD. Large Caps widened their YTD performance lead (S&P 500 +8.3%). Small Cap Premium slides to 15%.
Quality Stock Rankings: High Quality Fared Better In Q3
During a tumultuous Q3, High Quality stocks proved to be resilient, losing only 2.0% compared to Low Quality stocks’ 7.5% loss in Q3. Low Quality stocks’ prior momentum seems to have broken down, especially in September when they slid by 7.1% for the month.
Table of Contents
Stock Market
- Time For Defense
- Equal Opportunity?
- “Averages” Conceal Plight Of The Average Stock
- Breaking Bad
- Sectors: Where To Hide?
- Playing The Bounce?
- Cycles: Bearish Window Closing, Another Opening...
- Small Cap Leverage—A Concern?
- Quality Stock Rankings: High Quality Fared Better In Q3
- The Evolving State Of India’s Energy Sector Price Reform
Of Special Interest
Macro Monitor
- Interest Rates & Currencies: It’s Complicated
- Mid-Term Election – Favorable For Stocks
- Risk Aversion Index—Moved Up Again, Stayed On Higher Risk Signal
- U.S. Bonds
Equity Strategies
- GS Scores Hold Up During Volatility
- Highlighted Attractive Groups and Current Attractive/Unattractive
Quant
Market Internals
- Earnings Momentum
- Small/Mid/Large Cap - Small Caps Experience Worst Monthly Return Since May 2012
- Growth/Value/Cyclicals
- Additional Factors
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolios
Major Trend
Fund Flow Trends
Estimating the Downside
At Random
- The Contrarian
- 'Nut'
- Oktoberfest!
- Same Song, Second Verse From David Kurzman
- Spousal Relations
- I Usually Can’t Stand Packer Fans But...Well Played
- Vikings And Packers
- A Few Ramblings From Zach Galifianakis
- Police Blotter Via Scott Weeldreyer
- At Random On The Road
- It’s Polish Heritage Month!
Appendix
MTI Turns NEGATIVE In Early October
Latest MTI calculation deteriorated to Negative (based on data for the week ended October 3rd). We expect further significant losses in the stock market near term and have cut net equity exposure in Core and Global asset allocation portfolios to 40%.
“Averages” Conceal Plight Of The Average Stock
September’s small S&P 500 loss of less than 2% disguised a significant breakdown in the “average stock.” In fact, the S&P 500 has been tougher to beat than at any time since the Tech Bubble.
Interest Rates & Currencies: It’s Complicated
The recent sudden strength in the dollar is mostly attributable to the divergent central bank policies. This supports a bullish dollar outlook over the medium term.
Are We Floating In Another Share Buyback Bubble?
Share repurchase activity among U.S. corporations is garnering a lot of negative attention as aggregate dollars spent on share buybacks are nearing the all-time highs last seen leading up to the financial crisis. We take a closer look at the recent activity to see if we are in for a repeat.
Small Cap Leverage—A Concern?
With the Fed mulling over a rate increase, investors may have already started to avoid companies with excess leverage. Unfortunately, Small Caps, on average, are in this camp.
Small/Mid/Large Cap - Small Caps Experience Worst Monthly Return Since May 2012
In September, the Russell 2000 index lost 6% and is down 4.4% YTD. Large Caps widened their YTD performance lead (S&P 500 +8.3%). Small Cap Premium slides to 15%.
Quality Stock Rankings: High Quality Fared Better In Q3
During a tumultuous Q3, High Quality stocks proved to be resilient, losing only 2.0% compared to Low Quality stocks’ 7.5% loss in Q3. Low Quality stocks’ prior momentum seems to have broken down, especially in September when they slid by 7.1% for the month.
Stock Market
- Time For Defense
- Equal Opportunity?
- “Averages” Conceal Plight Of The Average Stock
- Breaking Bad
- Sectors: Where To Hide?
- Playing The Bounce?
- Cycles: Bearish Window Closing, Another Opening...
- Small Cap Leverage—A Concern?
- Quality Stock Rankings: High Quality Fared Better In Q3
- The Evolving State Of India’s Energy Sector Price Reform
Of Special Interest
Macro Monitor
- Interest Rates & Currencies: It’s Complicated
- Mid-Term Election – Favorable For Stocks
- Risk Aversion Index—Moved Up Again, Stayed On Higher Risk Signal
- U.S. Bonds
Equity Strategies
- GS Scores Hold Up During Volatility
- Highlighted Attractive Groups and Current Attractive/Unattractive
Quant
Market Internals
- Earnings Momentum
- Small/Mid/Large Cap - Small Caps Experience Worst Monthly Return Since May 2012
- Growth/Value/Cyclicals
- Additional Factors
Portfolios
- Core & Global Asset Allocation Portfolios
- Domestic & Global Long-Only Portfolios
- 100% Short Portfolios
Major Trend
Fund Flow Trends
Estimating the Downside
At Random
- The Contrarian
- 'Nut'
- Oktoberfest!
- Same Song, Second Verse From David Kurzman
- Spousal Relations
- I Usually Can’t Stand Packer Fans But...Well Played
- Vikings And Packers
- A Few Ramblings From Zach Galifianakis
- Police Blotter Via Scott Weeldreyer
- At Random On The Road
- It’s Polish Heritage Month!
Appendix
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