For more than a quarter century, The Leuthold Group has tracked hypothetical industry group portfolios composed of the previous year’s “Dreams” (best performers) and “Nightmares” (worst performers). The former is a gauge of a simple, trend-following investment strategy, while the latter is a crude form of industry group “bottom-fishing.” Sticking with tradition, the following pages detail how the 2013 Dream and Nightmare portfolios faired in 2014, and we reveal which industries qualify in the Dream and Nightmare portfolios of 2014.
Based on loud bearish complaints about the “junk rally”—and our commentary on the Revenge-of-the-Nerds (anti-momentum) effect—it should come as no surprise that 2009 marked the most dramatic reversal of industry leadership we have seen in our twenty-plus years of tracking this work.
Among institutional favorite type stocks, the Dream Individual Stock Portfolio was up 23.6%, while the Nightmare Portfolio was down 20.7%
Much of the January Green Book is devoted to tradition, so too is this section.
Much of the January Green Book is devoted to tradition, so too is this section. We resumed this tradition two years ago and have found it to be quite interesting. We now annually conduct this exercise each January, examining the previous year's leading and lagging stock market groups.
Last year, we resumed a tradition started a number of years ago.
For a number of years we conducted an annual exercise each January, examining the previous year's leading and lagging stock market groups.
Each January we present for the preceding year what would have been, from a group standpoint, the perfect portfolios (Institutional and Aggressive). In 1983 the dream Institutional portfolio was up 56%, the Aggressive up 70%. The worst possible portfolio for 1983 was down 18%. Take a look and see where you should have and shouldn’t have been.