For the stock market, it was a most deceiving first half of the year, punctuated with a real-life Greek drama. The quarter ended with the S&P 500 price average virtually unchanged for the past six months. In fact, by some measures, the broader stock market has not changed much at all from the second quarter of 2014. However, this rather muted performance hid the fact there was plenty of downward movement going on under the surface. For example, the energy sector experienced a complete bear market beginning last summer dropping nearly a quarter in price. Importantly, the economically sensitive Dow Jones Transportation and interest rate-sensitive Utility averages suffered double-digit price declines from recent highs. Despite mild S&P price appearance, thanks to the strength of a few very heavily weighted issues, we characterize much of the market as being in a “stealth” correction. In simple terms, market action has been much weaker than it appears on the surface and portfolios reflect the underlying weakness. This disparity in market action presents an interesting junction in the stock market. Click Here to Continue Reading
Click the following link to download a copy of the presentation. North Bay Investors 9.13.14
Contrary investing is the concept involving taking the opposite side of the majority or the “conventional wisdom” of the day and can be very effective when opinion is heavily one-sided. In this commentary (click to read) we highlight two contrary ideas currently featured in our privately managed accounts and actively managed ETF.