About Me

Retired chief investment officer and former NYSE firm partner with 40 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, February 22, 2012

Fundamental Stock Market Indicator

Today, I present a link to economist Ed Yardeni's fundamental stock market indicator. It is
close to my weekly cyclical market indicator, but there are some substantial differences. He
uses a consumer comfort measure and he also deploys an industrial commodities index which is
priced in US $. I use a broader more nearly dollar neutral index for commodities and an array
of leading economic indicator data that is available weekly plus a conservative weekly coincident
indicator that reflects various components of retail sales. We both weight commodities and the
initial unemployment insurance claims heavily. Yardeni model

These indicators are coincident because key elements of the data sets are not are not available
until either Thursday or Friday of each week, and some are already a week old when reported. So,
measures of this sort are not that useful for short term timing, but they provide an excellent
fundamental backdrop for the stock market on a trend basis.

Tp get Yardeni's conclusions from his work you need to be a paying subscriber.

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