Still Waiting for the “All Clear” Signal

| July 31, 2012

Please view the entire market update in pdf format at the following link: Still Waiting on the “All Clear” Signal




So Far So Good – 2012 following election year pattern fairly closely

| July 30, 2012

 The S&P 500 is up 10% year to date – which is a better than average year although you wouldn’t know it by the sentiment measures.  The following chart from Bespoke Investment Group overlays this year’s performance with a composite of all Presidential election years since 1928.  The inference from the prior pattern is that […]




Spike in 10 Yr. Treasuries price now equates to 66.7X the interest yield! YIKES! This is either “stupid on steroids” or the world is coming to an end. Dramatic spikes in the 10 Yr. “P/E Ratio” in the past have been a prelude to above average stock market gains.

| July 14, 2012

The 10 Yr. Treasury now trades for 66.7X times its annual interest yield.  Without getting into why the rate is so low- recognize that the 10 Yr. “P/E ratio” is now almost 55 points higher than the S&P 500 P/E ratio on forward twelve month earnings estimates.  We have NEVER seen it so much higher […]




One Of The Best Stock Market Indicators Just Flashed A Buy Signal Not Seen In 15 Years

| July 8, 2012

Bank of America Merrill Lynch equity strategists just issued a note titled “Wall Street Proclaims The Death Of Equities“.  They point to their proprietary contrarian sell side indicator which is looking very bullish: After triggering a Buy signal in May, our measure of Wall Street bullishness on stocks declined again, marking the ninth time in […]




“No need to fear a recession” – The economy has slowed but slow does not equal recession.

| July 6, 2012

The ISM manufacturing and non-manufacturing reports (here) this week were both weaker than expected.  Capital Economics had this to say about the status. “Although it is very clear that the US economy has lost a lot of momentum, there are no real indications that it will soon come to a complete standstill or even go […]




No matter what the official labor number is reported to be – private sector jobs are increasing. This is good for sustained, moderate growth which is the best condition for high growth micro-cap stocks to standout and flourish.

| July 5, 2012

There is understandable anxiety about the rate of job growth as we approach the June labor report.  Reports from ADP and the NFIB suggest the anxiety may be overdone.  While job growth could be stronger, it is still “growth”.  It can certainly be said that the labor situation is NOT at a level that has […]




Business investment is a bright spot . . . up 11 consecutive quarters, 10.8% annual rate, running at an all time high rate.

| July 5, 2012

While investment in structures – both residential and commercial – has been depressed since 2008 investment in equipment and software has been booming.  This is consistent with our portfolio companies’ experience.  Our anecdotal experience with our management teams is that the boom is continuing.  The following chart comes courtesy of Brian Wesbury at First Trust […]




Mobile marketing – low penetration, high expectations for rapid adoption and increased ad budgets – 70% of survey respondents plan to increase budgets.

| July 3, 2012

A recent survey of business leaders regarding mobile marketing adoption and budgets has revealed that less than 50% of business advertisers are currently taking advantage of the medium.  A recent MediaPost article reported on an April survey by Strongmail.  But get this – “75% of the businesses not currently running mobile marketing programs plan to […]




Despite rally this year, the S&P500 is still testing a multi-decade low P/E ratio on forward 12 month earnings

| July 1, 2012

The S&P 500 has recovered 105% from the Great Recession low of 666 in March 2009.  It is still cheap when examined on basis of the forward 12 month (“FTM”) P/E ratio.  We are still testing the low FTM P/E of the lows in 2009.  We have to go back to Dec 1994 to find […]