Since we last wrote to you, the U.S. stock market has continued to soar. The S&P 500 and the NASDAQ 100 were both up 5% in October alone. Investor sentiment is bullish, the most speculative shares are leading the market, and many investors are convinced stocks can't correct until and unless the Fed stops the printing presses. So how do we and others who share our view come to the conclusion that the stock market is vastly overvalued when many pundits still maintain that stocks are reasonably priced?
In this issue, we'll explain why most of what we hear from the "reasonably-priced" camp is misguided. First, we'll show you how to make three proper adjustments to eliminate systematic and cyclical biases in those earnings estimates. Next, we'll show you a simpler valuation metric to adjust for distortions in earnings data. Finally, we'll show you the proper course of action to pursue in a speculative overshoot phase, including our top five picks for the month and two new stocks in an out-of-favor sector, plus updates on many of our current Master List names. More >>
The Federal Reserve continues to operate under the assumption that pumping massive amounts of liquidity into the financial system in an effort to boost stock market returns today (at the expense of returns tomorrow) is economic stimulus. The Fed was widely expected to announce a reduction in their massive money printing campaign, but instead of taking what amounted to a baby step, Bernanke & Co. flinched. Almost four and half years after the official end to the recession, the Fed is apparently convinced that the U.S. economy couldn't survive without an extra $10-$15 billion in monthly money printing.
The probability of a late-1990s style U.S. stock market bubble-and-bust has increased measurably. Investor complacency is elevated, bullish sentiment is on the rise, and speculation is rampant. The opportunities for sound long-term investment in the U.S. are few and far between. European stocks offer more favorable valuations. In this month's issue, we give you our analysis of the economic and political situation in Europe and our top five picks in the region. Our targeted approach will help you take advantage of the opportunities while controlling risk. More >>
December 04, 2013
For months now economic data have been moderate. Not a boom-time, but certainly not a recession. So far this week we've seen a slew of decent economic reports released. Starting the week on Monday was another jump in the ISM Manufacturing Index, this time to 57.3. That was well above the range analysts polled by […]More »
The Young Research Commodities chart book includes price, both real and nominal, for different time periods and annual rates of change for the commodities covered on the Global Investment Scorecard.
The Young Research Equities chart book includes a range of charts featuring indicators on stock market valuation, sentiment, relative strength, etc. for U.S. stocks over a variety of timescales.
The Young Research U.S. Economy chart book includes short and long-term charts on output and activity, the labor market, inflation, and consumer and business sentiment.
Since 1896, the average bull market has lasted 835 days and resulted in a doubling of stock prices. For more historical perspective on the duration and magnitude of bull and bear markets, check out our new Dow Bull and Bear Markets table.
Our Credit Markets chart book includes many of the charts we monitor and use regularly to formulate fixed-income investment strategy. The chart book includes long-term charts on nominal and inflation-adjusted treasury rates, policy rates, interest rate valuation indicators, and credit spreads.
Jeremy Jones, CFA, is the director of research for Young Research & Publishing and editor of the Global Investment Strategy newsletter. Jeremy is also the Chief Investment Officer at Richard C. Young & Co., Ltd., an investment advisor to high net-worth families and businesses. More »