Monday, July 7, 2008

Sectors and Styles Strategy Report: July 7, 2008

excerpts from this week’s report:

Model Growth Portfolio (MGP)
“Not even the strong underweight in Energy (producing a positive 28 basis points could offset the combination of poor results in the size & styles and global markets plus the occasional pricing distortion between the S&P 500 (-1.21%) and the economic sectors (-1.67%)…”

Model Growth Portfolio (MGP) Re-balancing
“No position changes are being recommended at this time...”

ETF Market Monitor
Econ. Sectors & Industries: The strong performers were finally hit big with Steel the biggest weekly loser tracked followed by Homebuilders. Biotech stood out on the plus side.
Size & Styles: The same story, strong giving way, was evident in this grouping as the Smids declined dramatically.
Global: Heavy losses across the entire spectrum (except the UK, which came off a very low prior week ending number).
Other: Gold and Commodities produced solid weekly results.

Expected Return Valuation Model
“One the significant values in running a valuation model is that it forces you into challenging the assumptions built into the model. In the case of the ERVM, some of the issues that must be resolved us whether projected operating earnings are accurate? In this regard, the much more conservative number reached via a top down scenario method does not appear to be out of line, especially when compared to the bottom up numbers forecast by…”

Moving Averages Scorecard
“Most of the damage was done in the prior week with last week’s action merely producing some near term deteriorating but no changes in the mega trends. Basic Materials, a market leader for several years, gave up considerable ground these past few weeks but has not produced a mega trend change thus far, as the following chart shows…”

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