Sand Spring Advisors LLC
Recent Perversity in May
June 10, 2003
by, Barclay T. Leib
As frustrated technically as we became with May equity market strength, we were heartened today to receive from a hedge fund manager the following fundamental observations about the past month. We share these observations with you to highlight once again the silliness and unsustainability of recent equity strength. Specifically, during May 2003, lower quality names were the rage with investors as evidenced by:
In short, all the crap rallied. Once in a blue moon, these things happen, but to bet on the continuation of such a phenomenom is not a high probability proposition.
- Stocks whose earnings have declined over the past two years outperformed stocks whose earnings have risen over he past two years by 400 basis points...[More precisely,] stocks whose earnings have fallen the most over the past two years outperformed stocks whose earnings improved the most over the same period by 720 basis points.
- Stocks with operating losses over the past 12 months outperformed stocks with operating profits over the past 12 months by 190 basis points.
- During May, stocks with a high variability of historic earnings outperformed stocks that have exhibited consistent growth. In addition, buyers demonstrated a preference for stocks with uncertain future earnings over stocks with greater earnings predictability.
- Also in May [and as hard as it may be to fathom,] stocks with negative analysts revisions outperformed those with positive analyst revisions; stocks with low operating margins outperformed those with higher margins; and stocks with deteriorating balance sheets outperformed stocks with improving capital positions.
Non-subscribers are invited to access our May 26th article, "Debt Bubble & Islamic Threats," together with other past articles, by signing up for a quarterly Sandspring.com subscription below.
How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.
Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).
Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. The opinions expressed are not intended as specific investment advice, and simply represent our personal views offered here under our right of free speech. Sand Spring Advisors is a NFA registered CTA/CPO, but is not a Registered Investment Advisor. We do not directly trade any client funds. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and we will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.
If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"
Take me back to the Sand Spring Home Page
Comments or Problems
Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at information@Sandspring.com
10 Jenks Road,
Morristown, NJ 07960
Phone: 973 829 1962
Facsimile: 973 829 1962
Best Experienced with
The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC
This page and all contents are Copyright © 2002 by Sand Spring Advisors, LLC, Morristown, NJ