Secondary Stocks
Secondary Stock Surge Continues: A Look at the “Secondary Swinger” Issues
Jim Floyd has cranked up another interesting index for us to center attention on “where the action is” in the secondary arena. The study provides a good picture of the wide part of the ultimate narrow door - a group of secondary issues dominating current trading activity.
Secondary Stocks: Is It For Real?
Once again secondary stocks have started out the New Year with a burst of strength. Is it for real this time? Or is it just another January false start for secondary stocks?
Secondary Stocks/Big Cap Stocks
Secondary stock measures were up 7%-9% in November compared to 5%-6% for the capitalization weighted measures. All we can say is, it’s about time!
Should You Ever Buy Secondary Stocks Again?
The two most common questions we hear from equity only managers are: “When (if ever) should we start buying secondary stocks?” and “When do you expect a market leadership shift to the cyclicals?”
Secondary Stocks/Big Cap Stocks
Secondary stocks were down a big 9%-10% in September compared to 5%-6% declines for the capitalization weighted measures. Year to date, secondary stocks are down twice as much as the cap weighted measures.
Secondary Stocks and Secondary Stock Measures
For years we have been searching for better measures of secondary stock activity. When the new Russell 1000, 2000 and 3000 indices were developed we thought our search was over. Despite some criticism of the Russell indices, we still think this index gives the best representation of secondary stock action.
“Is the Move in Secondary Stocks Over?”
No, the move in secondary stocks is not over. However, it is unlikely that the 1988 to date margin of small stock performance superiority will be sustained.
The Shift to Secondary Stocks
March was another strong relative month for secondary stocks. We are now operating under the assumption that a significant shift in market character has occurred.
The Shift to Secondary Stocks: Is It For Real?
February was a darn good month for secondary stocks. Most of our measures of secondary stock relative momentum broke their 3-4 year downtrends. We are now operating under the assumption that a significant shift in market character has occurred.
When Should You Buy Secondary Stocks?.....Continued
The Leuthold Group's special research study on this subject was sent to clients last month.
Should You Swear Off Secondary Stocks?
Some of our clients are taking a pledge to never again buy secondary stocks, especially OTC issues. We urge you not to take this same pledge. Since mid-1983 secondary stocks have lagged badly, but this is not typical.
Tracking the Big Cap and Secondary Stock Relationship...Some New Analytical Tools
Historically, small cap stocks have outperformed big cap stocks in about two out of three years. But this has not been the case since mid-1983. What is going on? Has the investment world changed? Will small stocks ever again lead the parade?
Inside the Stock Market
The Major Trend Index improved somewhat in September but remains in negative territory. The strong September down move was no surprise, it appears that a major cyclical market top is in progress. Portfolio “Insurance” played a significant role in the September decline and it could play the reverse roll in a future market rally.
Client Questions
Here again are some of the client queries we have had over the last month.
Client Questions
Let’s get some recent client questions out of the way, questions I suspect other readers might also have.
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