Hulbert Highlights Indicators of an Overvalued Market

There are six strong reasons why today’s bull market is on “weak legs” according to Mark Hulbert in a MarketWatch article from earlier this month. He offers the following chart to illustrate that the current stock market is “more overvalued than it was at 79% to 95% of bull market peaks dating back to 1900”: Hulbert comments on current indicators including the following: Price-book ratio of 2.8 is higher than it was during 23 out… Read More

Hulbert: It’s Time to Sell

Constantly reacting to news headlines, writes Mark Hulbert in MarketWatch, will not only prevent an investor from beating the market, it can also precipitate “attacks of doom and gloom.” He reminds readers how the crash of China’s stock market in 2015 led to “panic selling in the U.S. equity market. In one five-minute window late in August 2015, the Dow Industrials were down by more than 1,100 points.” Hulbert points out that the panic at… Read More

An Oldie but Goodie: Dow Jones Utility Average Hits All-Time High

The Dow Jones Utility Average (DJU) was created back in 1929 to house utility stocks previously represented in the Dow Jones Industrial Average (DJIA). In a recent article published by MarketWatch, columnist Mark Hulbert asserts that the new high is good news for the stock market as a whole, but the party won’t last forever. According to Kelley Wright, editor of Investment Quality Trends (one of the myriad newsletters Hulbert tracks), “The DJU has tended… Read More

Is There a Red Flag in Front of this Bull?

This May marks the one-year anniversary of the record high in U.S. stocks, but don’t break out the champagne just yet. This milestone is sparking some concern as to whether the other shoe is about to drop, and the jitters are based on more than just a hunch. There’s been only one bull market since 1900 that has experienced a correction lasting longer than a year and, next week, we’ll be passing that. The question is: are things different now than in very other… Read More

Investing in Small Caps – Beware of Style Drift & Avoid Junk

If you are investing in small cap stocks, it is important not to make these two big mistakes writes Mark Hulbert for Barrron’s, because after few years of lackluster relative returns small caps look poised to turn the corner. As Hulbert points, smaller cap stocks have outperformed large caps over the long term but “for the past five years the Russell 1000 (which contains the 1,000 largest U.S. stocks) has beaten the Russell 2000 (the… Read More

Negative Implications of Falling Corporate Profit Margins

In his MarketWatch column, Mark Hulbert explains the distressing news buried by much of the recent positive reporting on the upward revision of GDP earlier this month. “Though the government’s upward revision of GDP growth looked positive on the surface,” he says, “a deeper look at the data shows the stock market currently is on shaky ground.” The report revealed that corporate profit margins (profits as a percentage of GDP) “experienced one of their largest… Read More

Best Performing Dividend Model Over 25 Years Shows Market Possibly Moderately Undervalued

In the continued debate around the valuation of equities, one dividend model, as developed by  Investment Quality Trends, indicates that stocks are still moderately undervalued, writes Mark Hulbert for Barrons. Investment Quality Trends dividend strategy looks for companies that are likely to be able to sustain their dividend, as a result of their strong financial charateristics, and secondly, the model compares a stock’s yield to its historical yield (not the overall market). “When a stock’s… Read More

Hulbert on Market-Timing Sentiment and a Contrarian View

In his MarketWatch column, Mark Hulbert discusses the relationship of market timers and contrarians when it comes to sentiment and market performance. Noting that it is possible “short-term market timers will be right,” Hulbert observes that “more often than not in the past, the market timing community has gotten it wrong – especially when they’ve coalesced around an extreme position.” And right now, his Hulbert Nasdaq Newsletter Sentiment Index (HNNSI), which is Hulbert’s most sensitive… Read More

A Lesson from the Modesty of Warren Buffett’s Recent Returns

Mark Hulbert at MarketWatch highlights Warren Buffet’s annual letter (the link includes a short video summary), but mainly emphasizes one crucial point that he suggests is a broadly important lesson for investors to keep in mind: how modest Buffet’s returns have been recently. Berkshire’s one-year growth was just 6.4% and Buffet’s 15-year annualized return is also in the single digits. Hulbert says this “can teach us what is realistic in the investment arena.” He contrasts… Read More

Hulbert: Market Likely to Rise Significantly Following Recent Drop

Mark Hulbert writes in MarketWatch that “the U.S. stock market over the next six months is more likely to be notably higher than it is to drop further.” He bases this prediction on a review of historical data since the Dow Jones Industrial Average was created in the 19th century: “a likely rally is what emerged when I studied all occasions over the last 120 years in which the stock market tumbled as precipitously as… Read More