Green Book April 2021
Time For A “Donut” Break?
Despite a resurgence in Small Cap stocks and Commodities, it still feels like an “S&P 500 World” for asset allocators. The financial media remain obsessed with S&P 500 targets, S&P 500 earnings, and S&P 500 stocks. And why wouldn’t they be? The S&P 500 beat the hypothetical, broadly diversified “All Asset No Authority” (AANA) Portfolio for the ninth consecutive year through 2020—and already leads AANA by more than 3% this year. In 2020, it was Commodities and REITs holding back the AANA Portfolio. In 2021, it’s Gold and Bonds.
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Featured Articles
Introducing The “New” MTI
We launched a revamped version of our Major Trend Index. The objective of the new methodology is to increase the flexibility, and even the subjectivity of the MTI. This approach recognizes the “subjective reality,” without forcing us into the tedium of re-weighting sub-factors if they become more or less critical as market dynamics evolve.
Research Preview: The Experiential-Reopening Trade
A strong argument can be made that experiential consumer services was the economic sector hardest hit by the pandemic lockdown. Cruise ships were forbidden to sail, restaurants and theme parks were closed, and air travel and hotel occupancy dwindled—all in an attempt to minimize personal/public interaction. The stocks of experiential companies took a beating in March 2020.
A Pricey Alternative To The S&P 500?
This month we focus on the valuations of the MSCI USA Index—which is nearly identical to the S&P 500. This is worth following mainly because the folks at MSCI are kind enough to provide us with much longer-term histories of Cash Flow and Book Value Per Share.
U.S. Dollar—A 2018 Redux?
The price action in the DXY Index over the last year shows an uncanny resemblance to the 2017-18 period, both in duration and magnitude. Overall, we believe the dollar could strengthen in the near term, but the longer-term bearish trend remains intact.
Reading The Short-Term Tea Leaves
The stock market’s technical backdrop remains pretty hard to assail, as evidenced by the current +4 reading on the revamped MTI’s Technical category. But there are a few short-term cracks that bear watching.
“Change In Equity Shares Outstanding Factor” Surprises In 2020
Historically, companies that have grown their equity share base over the previous year are apt to underperform the broad market in the ensuing months; those that had reduced shares outstanding tend to outperform. However, the opposite happened over the course of the last year. Here we explore the underlying details to see what contributed to this result.
Fresh In/Outflow Records For Fund Categories Continue In 2021
Massive net-cash outflow from equity mutual funds (MFs) shows no sign of slowing, even as equity markets notch new record highs. Combined MF net outflow that focuses on domestic and foreign equities tallied a remarkable $646 billion in 2020—practically doubling the previous outflow record set in 2019.
Table of Contents
Stock Market
- Equity Financing On The Rise In Some Market Segments
- The “New” MTI Debuts At High Neutral
- Time For A “Donut” Break?
- Reading The Short-Term Tea Leaves
- Introducing The “New” MTI
- A Pricey Alternative To The S&P 500?
- EAFE And EM: Long Past Their “Peaks?”
- Still Heating Up…
- Putting More And More On Margin
- Snack Time?
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Fund Flow Trends
Estimating the Downside
At Random
- Cartoon of the Month - April 2021
- We Fiddle With The Clocks
- Meet the wood of your dreams on Timbr!
- The Future Of College Athletics?
- A Few Nuggets From The Coach
- A Woman Visits The Doctor... From James Paulsen, Ph.D.
- Prison Break… From Charlie Bachman
- Mickey’s Divorce... From Bob Woodruff
- Baseball Fans... From Ray Graves
Introducing The “New” MTI
We launched a revamped version of our Major Trend Index. The objective of the new methodology is to increase the flexibility, and even the subjectivity of the MTI. This approach recognizes the “subjective reality,” without forcing us into the tedium of re-weighting sub-factors if they become more or less critical as market dynamics evolve.
Research Preview: The Experiential-Reopening Trade
A strong argument can be made that experiential consumer services was the economic sector hardest hit by the pandemic lockdown. Cruise ships were forbidden to sail, restaurants and theme parks were closed, and air travel and hotel occupancy dwindled—all in an attempt to minimize personal/public interaction. The stocks of experiential companies took a beating in March 2020.
A Pricey Alternative To The S&P 500?
This month we focus on the valuations of the MSCI USA Index—which is nearly identical to the S&P 500. This is worth following mainly because the folks at MSCI are kind enough to provide us with much longer-term histories of Cash Flow and Book Value Per Share.
U.S. Dollar—A 2018 Redux?
The price action in the DXY Index over the last year shows an uncanny resemblance to the 2017-18 period, both in duration and magnitude. Overall, we believe the dollar could strengthen in the near term, but the longer-term bearish trend remains intact.
Reading The Short-Term Tea Leaves
The stock market’s technical backdrop remains pretty hard to assail, as evidenced by the current +4 reading on the revamped MTI’s Technical category. But there are a few short-term cracks that bear watching.
“Change In Equity Shares Outstanding Factor” Surprises In 2020
Historically, companies that have grown their equity share base over the previous year are apt to underperform the broad market in the ensuing months; those that had reduced shares outstanding tend to outperform. However, the opposite happened over the course of the last year. Here we explore the underlying details to see what contributed to this result.
Fresh In/Outflow Records For Fund Categories Continue In 2021
Massive net-cash outflow from equity mutual funds (MFs) shows no sign of slowing, even as equity markets notch new record highs. Combined MF net outflow that focuses on domestic and foreign equities tallied a remarkable $646 billion in 2020—practically doubling the previous outflow record set in 2019.
Stock Market
- Equity Financing On The Rise In Some Market Segments
- The “New” MTI Debuts At High Neutral
- Time For A “Donut” Break?
- Reading The Short-Term Tea Leaves
- Introducing The “New” MTI
- A Pricey Alternative To The S&P 500?
- EAFE And EM: Long Past Their “Peaks?”
- Still Heating Up…
- Putting More And More On Margin
- Snack Time?
Of Special Interest
Macro Monitor
Equity Strategies
Quant
Market Internals
Portfolios
Fund Flow Trends
Estimating the Downside
At Random
- Cartoon of the Month - April 2021
- We Fiddle With The Clocks
- Meet the wood of your dreams on Timbr!
- The Future Of College Athletics?
- A Few Nuggets From The Coach
- A Woman Visits The Doctor... From James Paulsen, Ph.D.
- Prison Break… From Charlie Bachman
- Mickey’s Divorce... From Bob Woodruff
- Baseball Fans... From Ray Graves
Perception for the Professional
March 2026 Issue
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March 2026 Issue
