About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, June 16, 2010

Stocks -- Cyclicals Leadership

Cyclicals were the hands down leaders in the first phase of the
cyclical bull run. But that leadership has lost substantial momentum
as investors have been discounting an eventual moderation in the
very strong pace of earnings recovery for cyclical companies. What
may be a more important now is whether the cyclicals can avoid a
sharp downturn in relative strength, as that might well signify that
investors are losing substantial confidence in the economic recovery
story. Although relative strength of the cyclicals has flattened out in
2010, we have yet to see that sort of destructive behavior as the
chart link shows.

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