Hulbert: A New Approach to Momentum Investing

New research has shown that a more effective way to profit from the momentum effect is to buy the “hottest” factors rather than the best-performing stocks. This according to a Wall Street Journal article by Mark Hulbert, founder of Hulbert Financial Digest. Researchers found that stocks held in a high-momentum portfolio tend to share the same “factors” and that the “real momentum effect actually takes place at the level of these factors rather than individual… Read More

The Next Bear Market Could See a 35% Dip in Dow

In a recent article for MarketWatch, columnist Mark Hulbert explains that the severity of the next bear market has become a pressing question of late, “since Wall Street has shifted from whether a U.S. recession will occur in the next 12-18 months to when.” To determine whether the severity of the next bear market could be predicted, Hulbert analyzed all 36 bear markets since 1900 (data from Ned Davis Research). His findings are charted below:… Read More

Hulbert: Surprising Connection Between Bull Market and Share Buybacks

A research study published last year in the Financial Analysts Journal found that net buybacks account for the bulk of the intermediate- and longer-term differences in stock market returns around the world. This according to a recent Wall Street Journalarticle by columnist Mark Hulbert. “This comes as a surprise,” Hulbert writes, “because the conventional wisdom is that economic growth is by far the most important factor in the outperformance of certain countries’ stock markets in… Read More

Hulbert: The Bull Market is Only Three Months Old

An article in MarketWatch  by columnist Mark Hulbert says the bull market that began in March of 2009 “came to an end long ago. If we’re even in a bull market right now—and that is not for sure—an argument can be made that it’s less than three months old.” Given what Hulbert describes as the “semi-official” definition of a bear market is a 20% decline in one or more of the major market averages,” he… Read More

Hulbert: Sentiment a Good Sign for Contrarians

In an article for MarketWatch, columnist Mark Hulbert reports that “the typical stock-market timer remains extremely pessimistic. That, according to the contrarian’s logic, is a good sign.” Hulbert explains that, from the contrarian point of view, continued skepticism in the market is a good thing. He notes at the time of the article (last December), the average recommended equity exposure as measured by the Hulbert Stock Newsletter Sentiment Index (HSNSI) stood at -15.6%, one of… Read More

Hulbert: Fund Performance is Largely Luck-Driven

In a recent Wall Street Journal article, Mark Hulbert makes the case that even over periods as long as ten years, investors stand a good chance of underperforming their benchmark, “simply because of bad luck in their timing.” The culprit is volatility, Hulbert argues, describing an experiment conducted by professors Eugene Fama and Ken French to test strategy performance. The experiment revealed that “for each of the investment strategies they studied, there was a significant… Read More

Hulbert: Is the Traditional Method for Measuring Value Stocks Wrong?

In an article for The Wall Street Journal, columnist Mark Hulbert addresses what he describes as the “urgent” question of whether value investing or dead or merely suffering from an incorrect valuation method. Noting that value stocks—when defined by the traditional criterion of low price-to-book-value ratio—have fallen behind growth stocks for at least ten years, Hulbert cites growing concern as to whether they will come back as they have in the past. “That’s because,” he… Read More

Hulbert’s Observations from Tracking Investment Newsletters

A recent article in the AAII Journal outlined an interview with Mark Hulbert (of Hulbert Financial Digest) in which the MarketWatch senior columnist shared lessons learned during his years of tracking investment newsletters. Here are some highlights: One of the biggest lessons learned, Hulbert said, was that the “prospect of making money is so alluring that investors are willing to suspend all their rational faculties.” With regard to tracking the performance of model portfolios, Hulbert… Read More

Hulbert: Bitcoin Will Never Replace Gold

In an article for Barron’s, Mark Hulbert outlines the findings published in a paper by University of Chicago economics professor Eric Budish titled, “The Economic Limits of Bitcoin and the Blockchain.” According to Hulbert, Budish’s paper argues that bitcoin is “destined to play no more than a ‘bit’ role in the global monetary system because, if it were to grow ever more significant, it would become increasingly vulnerable to an attack that could destroy much… Read More

Mark Hulbert Offers Stock Trading Secret

In a recent article for MarketWatch, financial analyst and journalist Mark Hulbert describes what he calls the “market-timing industry’s dirty little secret: bear markets and increased volatility are good for business.” The explanation, according to Hulbert, is that it’s difficult to add value when the market is going straight up. “Who needs a market timer during conditions like those?” he queries. But when volatility kicks in and investors get nervous, subscriptions to advisory services tend… Read More