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 Lucky Seven -- Stocks have been on a tear for the past seven months. As April came to a close, five of our six model portfolios had double-digit gains for the year. Four of the six were ahead of their respective benchmarks and the two that weren't were not far behind.
A Costly False Move -- Over the past two and a half years, our technical indicators only sent one sell signal, and that lasted for less than a month. Nevertheless, by the time the next buy signal came, the technical indicators were 18% behind the index. Is something dreadfully wrong?
Their Own Little Worlds -- They say a bull market climbs a wall of worry. This one, however, seems to be sitting atop a fantasy. Rather than play along, let's take an objective look at the politics and economics that will determine its path.
The Ultimate Question -- One question your money manager doesn't want to hear is, "Why do I need you?" Investors tend to view the answer to this question solely in terms of return while investment professionals couch their answer in intangibles. Who's right or are either of them?
 Don't be scared by the name. Sure it sounds like something you tried to avoid in high school, but there really is something to it. Here -- in plain English -- is how you can make math work for you in portfolio construction.
Why rely on value, or growth, or any particular style for that matter? There are good reasons to consider each of these approaches -- and they're not as different as you might think.
Any monkey -- or even mutual fund manager -- can pick a bunch of stocks, but can they really build a portfolio? Here's how you can.  If you're a regular visitor, you might want to know what changed since the last time you were here. Look no further.
Unlike some of those newsletters you pay for that always tell you how wonderfully some of their selections did, we show you the whole shooting match.
The old page museum where you'll find previous commentary ("Stating the Obvious"), economic forecasts ("True Facts"), and evolution of our quant models ("Work in Progress"). Nothing's changed although dead links have been removed.  For the Week Ending May 25, 2012 At least they weren’t selling. That’s about the best thing that could be said about the stock market last week. Just looking at closing prices, one might think it had been a tranquil week. Those who watched the daily tape knew better. Volatility was still high, but that was partially because of intra-day swings that saw stocks move triple digits in one direction only to reverse course before the close. All the market-moving news was negative. And most of it came from Europe. With Greek elections still three weeks away, the country was finally lurching toward a final solution to the ongoing credit crisis. For the first time since problems arose, a Greek exit from the euro was looking more like a reality than a threat. All else being equal, it would seem to be the most effective solution, but against the backdrop of the fragile EU and its equally struggling economies, it may truly be the worst alternative. The heart of the problem lies in the hybrid economic structure of the euro nations. Although each maintains its own independent government and responsibility for its own domestic economy, the common currency ties each country’s hands when it comes to monetary policy. In the past, when sovereign debt ballooned and national borrowing was at risk, the country’s central bank could simply print more currency and inflate the country out of trouble. That’s what the Fed’s been attempting to do for three years now. Although it’s not yet been successful, at least it has the opportunity to try.
The same can’t be said for Greece or any of the other euro nations. Germany and France have been leading the group, and Germany’s aversion to inflation (dating back to the aftermath of World War I) tilts the euro nations towards austerity rather than liberal monetary policy. As a result, Greece, Spain, Portugal, and Italy have been forced to rely on loans from the EU rather than their own printing presses Greece is finally approaching the end of the rope. With little domestic interest in the austerity measures pushed by Germany and supported by the prior government, it’s highly unlikely the country will behave as required to continue the process. With German Chancellor Angela Merkel dead set against sovereign Eurobonds, the only remaining alternative is the return of the drachma. The euro nations have gone to great lengths to keep the EU together, but no one has made any contingency plans for a withdrawal or worse yet, a break-up. With Greece teetering on the brink, someone better get busy. That’s what weighed on the market last week. U.S. investors fear the uncertainty of what will happen should Greece withdraw from the euro. The European nations are key trading partners and any damage to their economies will have at least short-term effects on U.S. trade and international profitability. To make matters even worse, last week international economists issued a forecast for the EU to actually experience a slight decline in GDP this year with recession a real possibility. China’s economy is also showing signs of slowing which could be a drag from yet another front. Ironically, although many investors consider a Greek withdrawal from the euro as the quickest and most complete solution to the crisis, it’s probably also the most dangerous alternative. With no sure plan to handle it and bank runs already sporadically occurring across the Eurozone, such a move could lead to deeper and more widespread turmoil. To paraphrase King Pyrrhus of Epirus, if Greece is victorious in this manner, the EU could be utterly ruined. With stocks trading on the daily headlines, this wouldn’t be a welcome development. Despite the volatility and uncertainty, investors can be heartened by the fact that the crisis in Europe and signs of a slowing Chinese economy make the U.S. economic environment superior by comparison. Any positive developments abroad will (initially at least) bring greater benefits here at home. In the meantime, the flight to safety will provide support for domestic stocks as well as bonds. No this certainly isn’t the best environment, but it’s far from the worst. JUNKER NO MORE -- Following Fitch Investors’ trail from last month, Moody’s raised Ford’s credit rating to Baa3, returning it to investment grade status. Immediately following Tuesday’s announcement, yields on Ford’s outstanding debt fell about 100 basis points and prices, which move in the opposite direction, rose accordingly. This is a major accomplishment for Ford, shedding junk status for the first time since 2005. Not only that, making this more notable is the fact that Ford was the only one of the domestic automakers to accomplish this feat without accepting taxpayer bail-outs. It’s a shame that news of this magnitude was overshadowed by the foreign credit crisis. It is, however, a sign that last decade’s domestic credit crisis is yet another one step removed.
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