Green Book April 2020
The Bull Is Dead, But The Leaders Live On
The bull market of 2009-2020 is no longer. But its spirit—its leadership—has somehow lingered, right through the worst of the decline and during the eleven-day, +19% S&P 500 bounce that followed. For those who must remain fully invested, the best way to have played the corona-collapse was to have come into it holding the “trendiest” and most expensive stocks the market had to offer—and then doing nothing! “QQQ” has been the perfect vehicle in that regard, but anything “Large” and “Growth-y” has sufficed.
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Featured Articles
Did The 20% Bounce Kill The Bear?
We rolled our eyes when Barron’s and others proclaimed a “new bull market” after a three-day, 21% surge off the March low. That incredible bounce is much more likely to be the first of at least a few bear market rallies.
Are You “De-Worsified?”
In recent weeks, we’ve seen the “sell-side” investment community get about as cautious as it ever gets, recommending investors to “trim risky holdings on ‘up’ days” and “stay diversified.” However, these cheerleaders’ idea of diversification is usually to hold more equities in different sizes and styles.
Are Foreign Stocks Cheap Enough?
For those who must remain fully invested, an interesting (if not sickening) feature of the bear market is that those who entered it loaded with the most expensive and “trendiest” stocks and sectors have lost the least.
Leadership Rotation And Bear Markets
Bear markets are the financial system’s version of the changing seasons—a cycle we “enjoy” to extremes here in Minnesota.
A Cross-Asset Dash For Cash
March’s mad dash for cash didn’t stop with rates/credit/FX markets. Among equities, there was also a strong preference for cash liquidity. The market rewarded companies that had strong cash positions and punished those without—which explains why traditionally defensive styles actually underperformed.
Popular Low/Minimum Volatility Strategies Disappoint
During the peak-to-trough market drawdown through mid-March, some of the most popular Low/Min Vol ETFs did not perform as anticipated. Stable and boring businesses, that weather downturns relatively well, are facing atypical vulnerabilities.
Is Passive Ownership Exacerbating The Sell-Off?
With the enormous popularity of ETFs, we’ve wondered if the high level of passive fund ownership could lead to stock price deviation from company fundamentals, and thus create greater price volatility.
Time To Revisit “Why We Normalize Earnings”
With an economic calamity and the Easter season upon us, we thought this would be a great time to resurrect our “Why We Normalize Earnings” vignette. Long time readers will recognize this as a staple from Green Books’ past.
Table of Contents
Stock Market
- Is Passive Ownership Exacerbating The Sell-Off?
- Time To Revisit “Why We Normalize Earnings”
- The Bull Is Dead, But The Leaders Live On
- NASDAQ Goes “Parabolic?”
- Did The 20% Bounce Kill The Bear?
- Looking To Credit For Clues
- Confidence Is The Key
- A Bear Market In Price, But Not Time
- How To Tell When Sellers Are “Exhausted”
- Small Cap Smack-Down
- Are SMIDs Cheap Enough?
- Are Foreign Stocks Cheap Enough?
- Are You “De-Worsified?”
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Did The 20% Bounce Kill The Bear?
We rolled our eyes when Barron’s and others proclaimed a “new bull market” after a three-day, 21% surge off the March low. That incredible bounce is much more likely to be the first of at least a few bear market rallies.
Are You “De-Worsified?”
In recent weeks, we’ve seen the “sell-side” investment community get about as cautious as it ever gets, recommending investors to “trim risky holdings on ‘up’ days” and “stay diversified.” However, these cheerleaders’ idea of diversification is usually to hold more equities in different sizes and styles.
Are Foreign Stocks Cheap Enough?
For those who must remain fully invested, an interesting (if not sickening) feature of the bear market is that those who entered it loaded with the most expensive and “trendiest” stocks and sectors have lost the least.
Leadership Rotation And Bear Markets
Bear markets are the financial system’s version of the changing seasons—a cycle we “enjoy” to extremes here in Minnesota.
A Cross-Asset Dash For Cash
March’s mad dash for cash didn’t stop with rates/credit/FX markets. Among equities, there was also a strong preference for cash liquidity. The market rewarded companies that had strong cash positions and punished those without—which explains why traditionally defensive styles actually underperformed.
Popular Low/Minimum Volatility Strategies Disappoint
During the peak-to-trough market drawdown through mid-March, some of the most popular Low/Min Vol ETFs did not perform as anticipated. Stable and boring businesses, that weather downturns relatively well, are facing atypical vulnerabilities.
Is Passive Ownership Exacerbating The Sell-Off?
With the enormous popularity of ETFs, we’ve wondered if the high level of passive fund ownership could lead to stock price deviation from company fundamentals, and thus create greater price volatility.
Time To Revisit “Why We Normalize Earnings”
With an economic calamity and the Easter season upon us, we thought this would be a great time to resurrect our “Why We Normalize Earnings” vignette. Long time readers will recognize this as a staple from Green Books’ past.
Stock Market
- Is Passive Ownership Exacerbating The Sell-Off?
- Time To Revisit “Why We Normalize Earnings”
- The Bull Is Dead, But The Leaders Live On
- NASDAQ Goes “Parabolic?”
- Did The 20% Bounce Kill The Bear?
- Looking To Credit For Clues
- Confidence Is The Key
- A Bear Market In Price, But Not Time
- How To Tell When Sellers Are “Exhausted”
- Small Cap Smack-Down
- Are SMIDs Cheap Enough?
- Are Foreign Stocks Cheap Enough?
- Are You “De-Worsified?”
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
Perception for the Professional
March 2026 Issue
Featured Articles
Sector Navigator
March 2026 Issue
