Hulbert: This Timing Model Says Bull Market Has Peaked

According to one dependable valuation model, writes Mark Hulbert in a recent article for MarketWatch, stocks are now more overvalued than they have been since 1969. The model Hulbert cites is based on Value Line’s Median Appreciation Potential (VLMAP), a number published weekly by Value Line, Inc. that represents the median of the projected valuations (in three to five years’ time) of 1,700 stocks monitored by the firm’s analysts. Hulbert says that a number of… Read More

Mark Hulbert on the Reality of Buybacks

The new tax legislation will encourage companies to repatriate much of the cash they now hold outside the U.S., much of which could find its way to stock repurchases, writes Mark Hulbert in a recent Barron’s article. But the expected surge in buybacks, he argues, “isn’t going to extend the bull market’s life longer than it would have lasted otherwise.” Hulbert cites the first research regarding share repurchases (published in the 1990s) which found that… Read More

Hulbert: Large Caps Now and Small Caps in January

Small-cap stocks outperform large caps, on average, over the long term, but almost all the small-cap advantage occurs in the early part of the year. This according to a recent MarketWatch article by Mark Hulbert. “As you can see from the chart below,” he writes, “their advantage gradually diminishes as the year progresses, and is actually negative by the last quarter of the year.” The widely-accepted theory on the relative performance of these two asset… Read More

Hulbert: Value vs. Growth Valuation Spread Widest Since 2000

Earlier this month, price spread between value and growth stocks was the largest it has been since 2000, writes Mark Hulbert in a recent MarketWatch article. Hulbert offers data from Columbia University finance professor Kent Daniel showing that the average large-cap value stock’s price-book ratio is “barely half that of the average among large-cap growth stocks. Among small-cap stocks, value is even cheaper relative to growth.” The only time value has been relatively cheaper, according… Read More

Hulbert: Small Cap Sector Shockingly Overvalued

In a recent MarketWatch article, Mark Hulbert reveals a revised calculation that the small-cap sector is currently valued at a whopping 78.7 times earnings. He writes, “the Russell 2000’s true P/E today is higher than it was at either the top of the internet bubble or the 2007 bull market peak.” Hulbert describes the calculation, which he credits to financial services firm INTL FCStone’s Vincent Deluard, who told him that nearly a third of the… Read More

Hulbert on How to Boost Returns with Lower Risk

The founder of The Hulbert Financial Digest calls into question the idea that lower risk leads to lower returns, according to a recent MarketWatch article. “I know, I know” Hulbert writes, “That’s directly contrary to what financial planners have always insisted. But this conventional wisdom does not fit the data.” In his review of nearly 300 investment newsletter portfolios, Hulbert found that the “riskiest services have regularly produced some of the very worst returns.” Hulbert… Read More

Hulbert: Study Shows Rise in Short-Selling a Bearish Sign

A study recently published in the Journal of Financial Economics found that short sellers “on balance are right more than they’re wrong” writes Mark Hulbert for MarketWatch, arguing “it’s worrisome that the volume of short selling has risen so steadily this year.” According to University of Utah finance professor Matthew Ringgenberg, the reason that short sellers tend to do better is that it’s more challenging to sell a stock short than to buy it—that is,… Read More

Hulbert Cites Bear-Market Warning Indicator

  In a recent MarketWatch article, Mark Hulbert presents a market-timing indicator that “has a better historical track record than the cyclically adjusted price to earnings ratio” made famous by Nobel Laureate Robert Schiller. The indicator, he writes, is the “average portfolio allocation that U.S. households have to equities,” which has reached its current level five other times since the 1980s.” Four of those times, Hulbert asserts, “came right before major stock market tops.” Hulbert… Read More

Hulbert Says Momentum Investing Lives

There are still good reasons for investors to pursue a momentum strategy, writes Mark Hulbert in a recent Wall Street Journal article. He offers data collected by Eugene Fama (University of Chicago) and Kenneth French (Dartmouth College) showing that over the past ten years the stocks in the top decile vis a vis performance outperformed the S&P 500 by just 1.3 percentage points. “That is less than one-fifth as much as the strategy’s average annual… Read More

Hulbert on When to Fire Your Investment Adviser

Market-lagging performance, writes Mark Hulbert in a recent MarketWatch article, is not a good enough reason to fire your adviser. It’s extremely difficult, Hulbert says, to beat the market by “picking individual securities, ETFs or mutual funds—even among those with stellar track records for past performance.” He argues that, even those advisers and investment approaches that outperform will suffer periods of lackluster returns over the long-term. Hulbert cites the example of Warren Buffett and Berkshire… Read More