Investing/Trading Insights

Latest Market Projection

Projected changes in S&P 500 index as of the market close on 3/12/10...

For elaboration, go to
Stock Market Status.

Site Sections

Blog - Investing Notes records financial markets analyses and insights (not transient news) from an investor/trader perspective. Many entries are summaries of academic papers. Normal update schedule is most trading days. The list in the header above offers short-cuts to topical cross-sections of the blog archives.

Guru Grades offers a summary of the accuracies of various experts in predicting the behavior of the U.S. stock market, along with supporting notes and links to detailed evaluations. Normal update schedule is as required for minor updates and approximately monthly for grading.

Stock Market Status provides the current projections of our stock market models. Normal update schedule is monthly.

Real Earnings Yield Model presents the Real Earnings Yield Model of the stock market. Normal update schedule is as required for revisions.

Reversion-to-Value Model describes the Reversion-to-Value Model of the stock market. Normal update schedule is as required for revisions.

Earnings Forecast provides a projection of aggregate S&P 500 operating earnings over the next few quarters. Normal update schedule is at least every quarter to incorporate new actual earnings data.

Inflation Forecast provides a projection of the 12-month trailing inflation rate by month for the next year. Normal update schedule is monthly to incorporate new data.

Trading Calendar provides typical full-year and monthly performance of the stock market (S&P 500 index) based on its average behavior since 1950 and 1990. Normal update schedule is monthly to incorporate new data.

What Works Best? is a best guess effort to identify the kinds of investing strategies that might work best for individual investors. This section has no regular update schedule.

Investing Demons synthesizes a wide range of research in a big-picture overview of financial markets investing and trading. This section has no regular update schedule.

Strategy Test describes and tracks the performance of an investment strategy that combines several potentially exploitable stock market premiums/anomalies. Normal update schedule is as required based on activity, and monthly to record performance.

Cartoons highlights those blog entries that have original cartoons that reinforce investment concepts and issues. This section has no regular update schedule.

About provides some background information on CXOadvisory.com. This section has no regular update schedule.

Latest Blog Entry

March 13, 2010 - How About Roger Conrad?

A reader asked: "Can you evaluate Roger Conrad in Guru Grades?"

March 12, 2010 - How Do You "Purify" VIX?

A reader asked: "In 'Purifying Stock Market Sentiment Indicators', you say 'VIX purified of price action contains significant predictive power for future stock market returns.' How do you 'purify' the VIX of price action?"

March 12, 2010 - Refining the Accrual Anomalies

Are there ways to concentrate the predictive power of accruals for future individual stock and equity market returns? Two recent papers explore potential refinements. In the January 2010 draft of their paper entitled "Predicting Stock Market Returns with Aggregate Discretionary Accruals", Qiang Kang, Qiao Liu and Rong Qi focus on whether aggregate discretionary accruals (distinguished from normal accruals) are a better predictor of stock market returns than aggregate total accruals. In their February 2010 paper entitled "Percent Accruals", Nader Hafzalla, Russell Lundholm and Matt Van Winkle investigate scaling firm-level accruals by earnings rather than total assets to predict returns for individual stocks. These studies conclude that:

For the full blog, go to
Blog - Investing Notes.

Recent Guru Forecasts

3/12/10 [RSS Feed Date] - David Dreman: This year I think you should maintain your stock market exposure.

3/9/10 - Gary Kaltbaum: The market is now back in a confirmed rally... Until major averages show distribution again and breach the 50-day average, it is time to try to make hay.

3/8/10 - John Hussman: ...unfavorable valuations, overbought conditions, and hostile yield pressures, combining to produce a negative expected return/risk profile and holding the Strategic Growth Fund to a fully hedged investment stance. ...the particular set of conditions we currently observe has generally been resolved by abrupt market losses over a period of about 6 weeks.

3/5/10 - Don Luskin: Basically, the S&P 500 has done little over the last four months. It wouldn't surprise me if that inertia persisted for the rest of the year.

3/5/10 - Carl Swenlin: ...a new Thrust/Trend buy signal was generated on Monday, changing from a neutral stance.

3/4/10 - Comstock Partners: ...the market...is discounting events that will not happen...the disappointment will be severe...this is all part of a topping formation that will be followed by a substantial decline in the period ahead.

3/2/10 - Marc Faber: I am not sure we will make new highs, but if we make new highs above 1150, I don`t think it will be that far above the 1150 level, maybe 1200, and thereafter we will have a bigger correction on the downside.

2/26/10 - Bill Fleckenstein: ...for sure that the easy money in the stock market...has been made. ...we could see a very big trading range, with 1,150 for the Standard & Poor's 500 Index...on the topside and 850 to 900 on the downside.

2/26/10 - Carl Futia: ...the market is headed higher. The 1130 level is the short term target and I expect the market to reach 1200 over the next three months.

2/25/10 [RSS Feed Date] - Ken Fisher: The global expansion that began last spring...is building steam everywhere. The things now causing great fear...are just speed bumps... we now can reasonably expect several good stock market years. The volatility along the way creates additional buying opportunities.

2/22/10 - Jim Jubak: ...I expect [the rally] to peter out somewhere near the middle of the year.