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Weekly Update

A Roaring Bull Market in the Riskiest of Asset Classes

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Published February 12, 2021

It is no secret that money is chasing stocks, creating what some are calling ‘bubbles’ of valuation here and there (if not in the market overall). We talked last week about how valuation doesn’t really matter, supply and demand does. Right now, investors see no reason to hold back on the demand piece. We find no better example of this behavior than the massive (and sharply quick) run-up in shares of the most risky of companies, broadly speaking. That would be the smallest companies in the market – the microcaps. (more…)

Weekly Update

The Old Guard Flexes Some Muscle

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Published October 23, 2020

 

With the Nasdaq 100 (QQQ) index as the focus of our models, we spend a lot of time talking about that index and its major components – e.g. Amazon, Apple, Microsoft, et al. Another trend in the market, and one that might be poised to outperform the Nasdaq, is the old line industrials. (more…)

Weekly Update

Stocks are Looking Forward

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Published October 16, 2020

The stock market has a pretty good track record for determining who will win a presidential election.  The indicator looks at the market return over the three months leading up to the election.  A positive return suggests a win for the incumbent.  The data below, going back to 1928, shows an 87% success rate for the stock market in picking the ultimate election victor.
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Uncategorized, Weekly Update

Stock market seeks other drivers

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Published July 17, 2020

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A few miscellaneous notes this week that describe the current market outlook, foggy though it be.  Starting at the highest level with the wide range of earnings projections for the S&P 500.  Currently, the S&P 500 index trades around 3200.  If we look at the chart below, we see a 2021 earnings per share for the S&P 500 range of $135-170.  At $135, the S&P 500 is trading at price-earnings ratio of 23, on the high end of “normal”.

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Uncategorized, Weekly Update

Market Reaches Technical Inflection Point

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Published May 22, 2020

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The stock market has rallied hard off the March 23rd bottom, surprising almost everyone in the strength and lift of the move. This rally has brought the Nasdaq 100 (QQQ) back to positive on the year, a stunning development given the dire economic situation. That positive year-to-date print for the Nasdaq reflects the seeming fact that Covid-19 has served to accelerate trends which benefit these top companies of the digital economy – e.g. Amazon, Facebook, Google. That the Russell 2000 small-cap index remains down almost -20% year-to-date, while the equally-weighted version of the S&P 500 is down -16%, is perhaps a better stock market gauge of the overall economy’s troubles. (more…)

Uncategorized, Weekly Update

The Nasdaq Goes Its Own Way

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Published April 17, 2020

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The stock market’s recovery from its March plunge has seen a few groups and stocks rise to the top. Many of those favored groups and stocks are heavyweight members of the Nasdaq 100 stock index, trading under the symbol QQQ. (more…)

Uncategorized, Weekly Update

Happy Happy

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Published October 13, 2017

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The stock market continued its happiness this week rising to further new highs. This bullishness is certainly rewarding to our subscribers as well as, frankly, anyone fortunate enough to have chosen to invest in the Nasdaq late last year. (more…)

Weekly Update

A look at closed-end funds

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Published January 13, 2017

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An area of the investment universe that receives little attention these days is the closed-end fund. These funds seem to have fallen somewhat out of favor among individual “retail” investors as exchange-traded funds (ETFs) have exploded in popularity over the past decade. They are a niche investment product to be sure, but one that can offer unique and sometimes compelling opportunities. (more…)