|
Sector Model
|
XLB
|
3.97%
|
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
|
BBRY
|
7/16/2012
|
99.72%
|
313
|
|
CAJ
|
9/25/2012
|
5.26%
|
242
|
|
BOKF
|
2/4/2013
|
16.60%
|
110
|
|
SWM
|
2/12/2013
|
30.76%
|
102
|
|
MWW
|
4/11/2013
|
16.52%
|
44
|
|
ABX
|
4/11/2013
|
-21.67%
|
44
|
|
TPX
|
4/22/2013
|
-6.37%
|
33
|
|
TTM
|
5/6/2013
|
-3.87%
|
19
|
|
DLB
|
5/13/2013
|
0.64%
|
12
|
|
GMCR
|
5/24/2013
|
-1.41%
|
1
|
|
S&P
|
Annualized
|
10.82%
|
|
|
Sector Model
|
Annualized
|
25.83%
|
|
|
Large Portfolio
|
Annualized
|
32.05%
|
|
|
YTD
|
|
||
|
S&P
|
15.67%
|
|
|
|
Sector Model
|
24.23%
|
|
|
|
Large Portfolio
|
18.43%
|
|
No rotation.
As you can see, the year to date performance of the sector
model is again outstripping the full portfolio.
Meanwhile the Mousetrap continues to evolve, and the fundamentals are
increasingly moving toward larger companies.
That makes sense, in light of the outperformance of the
sector model, since the sector ETFs are cap weighted indexes.
It also makes sense as a trend continues to mature and as
retail investors pile into stocks.
Of further note is the fact that the fundamental filters are
beginning to make more sense from a classical value perspective. These are right at the top of the selections:
|
Cash Flow Growth 5-Year
|
High
|
|
Sales Growth 5-Year
|
High
|
|
EPS Growth 5-Year
|
High
|
|
Est EPS 1st Qtr Out
|
High
|
|
Est EPS 2nd Qtr Out
|
High
|
|
Total Return 1-Year
|
Low
|
That translates to three things:
1) Earnings have usually been good
in the past, and are
2) estimated to be good in the future, but
3) the price is depressed right now.
That’s simpler than what the model was spitting out before.
Heck, even Buffet could do that.
As for the market, I can’t say what it’s GOING to do. I can only comment on what it seems to THINK
it’s going to do. It THINKS it’s going
to go back to its long term median regression.
That would take the current trend above 2000 in mid-2015.
Keep in mind that the market thought it would ride the long
term regression back in 2007 too.
A regression is great for estimating what the market will do
a few business cycles out, but can’t tell you anything about the next few
months. It’s like that Shiller Yield I
graphed a few weeks ago: fantastic for estimating ten year returns, and
worthless in any shorter time frame.
The ONLY meaningful use of the Shiller Yield is to compare
regional indexes for long term opportunities.
But don’t use long term estimates to predict the short
term.
And for goodness sake, don’t use the news!
99% of the market news articles have no idea what they are
saying in terms of tradable calls. I
know this because they usually tell me what I’m thinking myself, and my brain
can’t time its way out of a paper bag.
News articles have only one true goal – to sell news
articles.
It’s like politicians – their only goal is to get
re-elected.
Or judges – their only goal is to keep from being
overturned.
So, news articles will write what you want to read; politicians
will do what their donators demand; and judges will adjust justice in favor of whoever
has more money to pay for appeals.
They don’t even pretend to be interested in truth, justice,
or the American way.
What they ARE interested in, is money: news sales, political
contributions, the richest litigant.
If you want to predict the future, you only need to do one
thing: follow the money.
Investing works the same way: stocks make money when businesses
make money.
End of story.
Tim
No comments:
Post a Comment