Green Book November 2020
Remembering Trump
Donald Trump will be remembered as the most polarizing political figure in U.S. history, but he was an unwitting consensus-builder on an issue that was long thought to be “settled science.” Since NAFTA, free-trade initiatives had enjoyed broad support among Republican members of Congress. But, based on either their independent scholarly research or their fealty to Trump, essentially all Republican officeholders have flipped on this issue. That leaves no constituency for free trade on either side of the aisle. Donald Trump, “the unifier.”
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Featured Articles
Tough Times For Allocators
Diversified, multi-asset portfolios have been weak performers for many years. The ultra-flexible, macro hedge-fund manager represents one extreme of the asset allocation continuum. At the other extreme would be the passive holder of multiple asset classes. It’s been a tough three years for this breed, too.
Large Cap Growth, Without The FAANG
FAANG has dramatically outperformed Large Cap Growth the past ten years, but is has become cheaper and slightly less growth-oriented in the process. We examine the extent FAANG performance has carried through to the rest of the Large Cap Growth universe and how to get growth without them.
Small Value Or Small Growth? Yes!
If there’s an emerging bubble in Growth stock investing, it certainly doesn’t apply to Small Caps. The “usual” premium for Growth over Value within the Small Cap space is nonexistent—both segments look historically cheap.
The Stock Market & U.S. Presidential Election Cycle Revisited
We crunch some numbers to see how 2020’s stock market trends have fared compared to the typical election year, and we slice and dice past post-election year trends at the sector and industry group levels to look at potential opportunities in the coming year.
Weight Watcher—Another Look At Sector Valuation
There are numerous ways to measure sector valuation, but we found the simplest one: sector weights. Overall, using simple sector weights, we arrive at the same conclusions about sector valuation as one would using conventional valuation metrics.
Research Preview: A Surprising Dividend Study
Dividends are a cornerstone of equity investing and, over the decades, they have produced a significant portion of the stock market’s total return. Previous Leuthold research has identified a strong dividend influence on total returns for small and mid-caps; a client recently asked if we found the same effect in the universe of S&P 500 companies. Specifically, have S&P 500 dividend-payers outperformed non-payers, and, second, have dividend growers outperformed non-growers?
SPACs: More Analysis Of Past Deals
Last month, we briefly discussed a burgeoning investment vehicle—Special Purpose Acquisition Companies (SPACs), also known as “blank-check companies.” Since the sole purpose of a blank-check company is to find an operating business to merge with, and subsequently bring it public, the best method to gain some understanding about the outcome of these relationships is to look at past deals.
Time For EM Stocks?
On the basis of both Normalized P/E and Price/Book, there’s plenty of runway for EM stocks if they get back to even the midpoint of their 20-year valuation range. Rising commodity prices and a weak dollar would obviously help, and we expect both in the year ahead.
Table of Contents
Stock Market
- SPACs: More Analysis Of Past Deals
- Remembering Trump
- Don’t Overplay The Election
- Liquidity: As Good As It Gets?
- Small Value Or Small Growth? Yes!
- VLT’s Struggles Are Telling Us Something
- Tough Times For Allocators
- Time For EM Stocks?
- Miscellaneous Musings On Inflation
- Energy: Still Too Early
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
- MTI Slips To Negative
- Earnings Momentum
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Estimating the Downside
At Random
Tough Times For Allocators
Diversified, multi-asset portfolios have been weak performers for many years. The ultra-flexible, macro hedge-fund manager represents one extreme of the asset allocation continuum. At the other extreme would be the passive holder of multiple asset classes. It’s been a tough three years for this breed, too.
Large Cap Growth, Without The FAANG
FAANG has dramatically outperformed Large Cap Growth the past ten years, but is has become cheaper and slightly less growth-oriented in the process. We examine the extent FAANG performance has carried through to the rest of the Large Cap Growth universe and how to get growth without them.
Small Value Or Small Growth? Yes!
If there’s an emerging bubble in Growth stock investing, it certainly doesn’t apply to Small Caps. The “usual” premium for Growth over Value within the Small Cap space is nonexistent—both segments look historically cheap.
The Stock Market & U.S. Presidential Election Cycle Revisited
We crunch some numbers to see how 2020’s stock market trends have fared compared to the typical election year, and we slice and dice past post-election year trends at the sector and industry group levels to look at potential opportunities in the coming year.
Weight Watcher—Another Look At Sector Valuation
There are numerous ways to measure sector valuation, but we found the simplest one: sector weights. Overall, using simple sector weights, we arrive at the same conclusions about sector valuation as one would using conventional valuation metrics.
Research Preview: A Surprising Dividend Study
Dividends are a cornerstone of equity investing and, over the decades, they have produced a significant portion of the stock market’s total return. Previous Leuthold research has identified a strong dividend influence on total returns for small and mid-caps; a client recently asked if we found the same effect in the universe of S&P 500 companies. Specifically, have S&P 500 dividend-payers outperformed non-payers, and, second, have dividend growers outperformed non-growers?
SPACs: More Analysis Of Past Deals
Last month, we briefly discussed a burgeoning investment vehicle—Special Purpose Acquisition Companies (SPACs), also known as “blank-check companies.” Since the sole purpose of a blank-check company is to find an operating business to merge with, and subsequently bring it public, the best method to gain some understanding about the outcome of these relationships is to look at past deals.
Time For EM Stocks?
On the basis of both Normalized P/E and Price/Book, there’s plenty of runway for EM stocks if they get back to even the midpoint of their 20-year valuation range. Rising commodity prices and a weak dollar would obviously help, and we expect both in the year ahead.
Stock Market
- SPACs: More Analysis Of Past Deals
- Remembering Trump
- Don’t Overplay The Election
- Liquidity: As Good As It Gets?
- Small Value Or Small Growth? Yes!
- VLT’s Struggles Are Telling Us Something
- Tough Times For Allocators
- Time For EM Stocks?
- Miscellaneous Musings On Inflation
- Energy: Still Too Early
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
- MTI Slips To Negative
- Earnings Momentum
- Small Cap vs Mid Cap vs Large Cap
- Growth vs Value vs Cyclicals
- Additional Factors
Portfolios
Estimating the Downside
At Random
Perception for the Professional
March 2026 Issue
Featured Articles
Sector Navigator
March 2026 Issue
