Posts Tagged 'Mark Hulbert'

Hulbert on Where to Invest if Deflation Hits

Published September 8, 2010 Economy , Historical Lessons , Sector Data Leave a Comment
Tags: ,

Would deflation be bad for stocks? Many investors appear to think so, judging from the market’s recent hiccups after signs that deflation could be rearing its head. But MarketWatch’s Mark Hulbert says that might not be the case — particularly for certain types of stocks.

In his most recent column, Hulbert says Ned Davis Research’s Senior Sector Strategist, Lance Stonecypher, offers some interesting data on how deflation has historically affected different types of stocks. “Perhaps the primary conclusion that Stonecypher reached was that, during past deflationary periods, the industry groups that performed the best fell into two categories: Necessity and Defensive,” Hulbert says. “Examples include Consumer Staples and Health Care.”

Continue reading ‘Hulbert on Where to Invest if Deflation Hits’

Hulbert Examines Presidential Election Year Cycle

Published August 6, 2010 Gurus Leave a Comment
Tags: ,

In his latest column for MarketWatch, Mark Hulbert  offers some interesting — and encouraging — data involving the “Presidential Election Year Cycle”.

According to the PEY Cycle, the third year in a president’s term is often the best for the stock market. (President Obama’s third year would thus start at the end of the current quarter.) Noting that some top bearish strategists, including Jeremy Grantham, have cited the cycle as reason to expect gains for the market, Hulbert does his own analysis.

His findings: Using the end of the third quarter as the start of a presidential year, Hulbert found that year 3 has indeed been the best year for stocks, going back to 1896. In fact, the 15.5% average return for the market during third years of presidents’ terms nearly doubles the next-highest year (which is Year 1, at 8.8%).

Hulbert adds that he ran statistical tests to see if the performance of the market leading up to Year 3 had an impact on the results. And he checked to see if valuations had an impact on Year 3 performance. In both cases, they did not impact the results. Year 3 performance was strong regardless of the market’s recent performance, and regardless of the market’s valuation going into Year 3.

Consumers As Contrarians Indicators

Published July 21, 2010 Behavioral Finance , Gurus , Historical Lessons Leave a Comment
Tags: , , ,

One of the reasons for the market’s tumble late last week was a much worse-than-expected consumer confidence reading. But according to Mark Hulbert and the research of Kenneth Fisher, the decline may actually be a bullish sign.

In his latest MarketWatch column, Hulbert says he recently examined how stocks fared in the month, year, and two-year periods following the release of the Conference Board’s monthly consumer confidence data. His findings: “The biggest monthly jumps in the consumer confidence index were, on average, followed by sub-par returns” for stocks. “Conversely, big drops in the index were typically followed by above-average returns.”

Hulbert also says that the “starkest patterns” in the data “were between monthly changes in the consumer confidence index and how the stock market had performed in prior months. That is, the stock market and consumer confidence tend to rise and fall together. … In other words, focusing on consumer confidence tells us more about how the stock market has performed in recent weeks than it does about the future. But insofar as consumer confidence tells us anything about the future, it’s that big drops are more positive than negative for the stock market.”

These findings are similar to the findings of investment manager Kenneth Fisher and finance professor Meir Statman. In a 2002 study, the duo found that declining stock prices are usually followed by declining consumer confidence, but that low consumer confidence readings are followed by strong stock returns more often than by low returns.

Mid-Term Election in Itself Not Cause for Concern, Says Hulbert

Published June 15, 2010 Gurus , Historical Lessons Leave a Comment
Tags:

While many believe that mid-term elections mean bad news for the stock market, Mark Hulbert says the data indicates otherwise.

In his latest MarketWatch column, Hulbert analyzes the performance of stocks in mid-term election years compared to other years. Previously, he writes, he has shown that the market’s performance in mid-term election calendar years “is not significantly different” than its return in other years, so his analysis this time focused on the magnitude of corrections that have occurred.

His findings: “On average, the Dow suffers a 19.3% correction during such [mid-term election] years. … But there’s less here than meets the eye. It turns out that all years, not just midterm election years, suffer corrections of more or less equal magnitude. For example, the average correction for non-midterm-election years is 16.7%. Given the variability in the year-by-year results, the difference between that and the 19.3% average that exists for midterm elections years is not significant at the 95% confidence level that statisticians often use to judge whether a pattern is genuine.”

Hulbert says he’s not sure how the mid-term election year myth has developed. But he suspects it has to do with people mistaking correlation for causation. He also says that the fallacy of the argument doesn’t mean that the market won’t continue to struggle this year. “But,” he adds, “if it does, it won’t be caused by the mere fact that this year is a midterm election year.”

Hulbert: Two Top Forecasting Models Bullish

Published May 26, 2010 Gurus , Market Timing Leave a Comment
Tags: , ,

Given the recent economic and market turmoil, there’s been a resurgence of pundits warning of a double-dip recession, or another major market crash. But newsletter-tracker Mark Hulbert says two econometric forecasters with excellent long-term track records are bullish right now.

The first is Sam Eisenstadt, the former Value Line research chairman. His model predicts that over the next six months, the S&P 500 will return about 20%. The other is Norman Fosback of Fosback’s Fund Forecaster, who used to head the Institute for Econometric Research. Fosback recently said his model expects the market to gain 26% in the next year, and 75% (12% annualized) over the next five years.

While noting that there’s no guarantee that past success will be replicated in the future, Hulbert says these two forecasters are worth listening to.

Continue reading ‘Hulbert: Two Top Forecasting Models Bullish’

Hulbert: Bearish Sentiment May Be a Bullish Signal

Published May 20, 2010 Gurus , Market Timing Leave a Comment
Tags:

Hulbert Financial Digest’s Mark Hulbert says he’s seeing extreme pessimism among newsletter editors he tracks — and that may bode well for the market.

”I’ve seen perhaps one of the fastest trips from the bull side to the bearish side among the advisors that I track that I’ve seen in years,” Hulbert tells CNBC, “and that’s an encouraging sign. You hear the old saying that the time to buy is when the blood is running in the street, and believe me the blood is running.”

The newsletters Hulbert tracks are on average recommending a mere 20% exposure to equities. That sort of sentiment may be a contrarian indicator, he says. He notes that in late April, some of his sentiment indicators showed there was as much bullishness among advisors as he’d seen in a decade — and that preceded the market’s recent decline. Now, the opposite may be happening, with the high negative sentiment presaging a turn for the better, as has often happened throughout history.

Hulbert: Market Flashing Rare “Buy” Signal

Published April 21, 2010 Gurus , Historical Lessons , Market Timing 1 Comment
Tags: ,

Newsletter tracker Mark Hulbert says that the market has recently triggered a rare “buy” signal that has historically been a precursor to strong stock gains.

The indicator is termed “breadth thrust” by Ned Davis Research, the firm whose data Hulbert cites in his latest MarketWatch article. The indicator flashes a “buy” signal when percentage of common stocks trading above their 50-day moving averages rises above 90%.

The signal has occurred only 13 times since 1967, Hulbert says — and three of those instances have occurred since the March 2009 low, the most recent coming just a couple weeks ago. Historically, following the signal, the S&P 500 has averaged returns of 4.6% over the next month; 8.2% over the next quarter; 13.1% over the next six months; and 19.7% over the next year. In the worst-performing one-year period after the signal occurred, the S&P still gained 11.6%, Hulbert says.

Continue reading ‘Hulbert: Market Flashing Rare “Buy” Signal’

New Study: Investors Fail Timing Test

Published April 13, 2010 Behavioral Finance , Historical Lessons , Market Timing Leave a Comment
Tags: ,

According to a new study, mutual fund investors don’t just tend to buy high and sell low — they also tend to do so shortly before the stock market reverses itself, causing them to get hit by big losses and miss out on big gains.

The study, highlighted by Mark Hulbert in his latest New York Times column, is entitled “Measuring Investor Sentiment With Mutual Fund Flows,” and was performed by two professors and a student at Tel Aviv University.

“The researchers focused on exchanges between equity and fixed-income funds in the same mutual fund family,” writes Hulbert. “In line with previous research on money flows into and out of mutual funds, they found that as the stock market rises, investors tend to transfer money from bond funds to stock funds, and vice versa. They also found something that had escaped notice among researchers: that the stock market tends to reverse itself in the weeks and months after these exchanges.”

Continue reading ‘New Study: Investors Fail Timing Test’

Hulbert on Why You Shouldn’t Fear the Presidential Cycle

Published January 22, 2010 Economy , Gurus , Historical Lessons 1 Comment
Tags: ,

Conventional wisdom holds that the second year of a U.S. president’s term in office — which, for President Obama, began this week — tends to be a bad one for stocks. But in his latest MarketWatch column, Mark Hulbert says that’s a misconception, and that the “presidential cycle” likely won’t have much effect on the market this year anyway.

Hulbert looks at the Dow Jones Industrial Average’s returns by presidential year over two periods: 1896 (when the Dow was created) to the present, and 1940 (when many say Franklin D. Roosevelt began the practice of presidents having a major impact on the economy) to the present.

The data shows that the second year in a president’s term on average has been met with a 4.7% Dow gain since 1896 — the worst year of the four-year cycle. But since 1940, the second year has actually been the second-best performer, generating returns of 5.6% per year.

The bottom line : “The picture painted by the data is less of abnormal weakness during the first and second years of the cycle than it is of abnormal strength in the third year,” writes Hulbert, noting that since 1896 the Dow has returned 12.5% in the third year of presidents’ terms; since 1940 the figure is 16.5%.

Continue reading ‘Hulbert on Why You Shouldn’t Fear the Presidential Cycle’

Top Timing Newsletters Bullish Heading into 2010

Published December 22, 2009 Gurus , Market Timing , asset allocation Leave a Comment
Tags: , , , , ,

As the new year approaches, the investment newsletters with the best track records of success in both up and down markets are on the whole bullish, MarketWatch’s Mark Hulbert notes.

According to Hulbert, the average recommended exposure to the domestic equity market among the newsletters making his 2010 “Honor Roll” is 82%, significantly higher than it was last year at this time, when the average was just 63%.

Hulbert’s “Honor Roll” is comprised of newsletters that have a market-beating track record in both and up down markets — criteria that only about 12% of the newsletters he tracks meet, he says. “The services that have made past years’ Honor Rolls have proceeded, on average, to outperform those that failed to make the grade,” he notes.

Continue reading ‘Top Timing Newsletters Bullish Heading into 2010′

Next Page »

Guru Investor Email Updates

    Free Guru Investor Email

     Subscribe in a reader

    Stock Screens, Portfolios & Analysis based on Buffett, Lynch & 10 Other Time Tested Strategies

    Validea.com - Risk-Free Trial

    Daily Archives

    Twitter Updates

      Follow streaming thoughts & links via Twitter

      Contact Us

        Thoughts or questions, email us.