Monday, January 14, 2008

Judgment Day

excerpts from this week's report:
"A worse case scenario is unfolding in the equity markets as valuation levels have entered extreme undervalued territory. According to the Expected Returns Valuation Model, rates have now gone so low that many 12% return zones are literally off the charts (see report). Moreover, one can find the 12% zones in the highly depressed levels of S&P 500 operating earnings (i.e. dropping below $82!). Since virtually no one is calling for such a decline in S&P 500 operating earnings over the next twelve months, there are two conclusions an investor can reach. Either:

• The US economy (and therefore the world economy as well as corporate earnings) will turn out to be far worse than expected or
• Stocks are currently severely undervalued

In the mix is also the issue of the credit squeeze and its real economy effects.

Presently, there are many that view the black hole of credit derivatives as being..."

"...The technicals for the market are, in a word, lousy. Mega trends readings (based on the Moving Averages Principle) have undergone a serious deterioration over the past several weeks to the point where every major style index tracked is flashing..."

"...With the disciplines outlined, there is one last piece to this investment strategy puzzle that bears noting.

The consensus thinking of many investment strategists is nearly unanimous and shows signs of groupthink. For example, the current issue of Barrons mirrors what panelists on the first of my Market Forecast events for this year stated..."

Investment Strategy Implications

"Having been in the investment game for over three decades, it is just such times as now when..."

also in this week's report:

* Expected Return Valuation Model
* Moving Averages Scorecard
* Model Growth Portfolio
* Sectors and Styles Market Monitor
* Key US Economic Indicators

To gain access to this week's report (and all reports), click on the subscription info link to your left.

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