The chart below shows the indexed returns of the two indices from 1985. The correlation of monthly changes between the BDI and S&P 500 from January 2007 was 0.33, which is relatively high to suggest some causal relationship. Looking longer term, the correlation of monthly changes was a miniscule 0.07, indicating little or no relationship between the two indices. The chart below shows the relative returns of the Energy Select Sector SPDR (XLE) compared to the S&P 500. The XLE remains in a secular relative uptrend, indicating that it remains in a secular bull phase. To capitalize on that theme of a recovery, secular commodity bull (my theme) and fallen angels, I offer the following. History seems to back up this theory, as the SPX’s returns following this signal outperform the index’s typical returns. In the eight instances that the BDI rose above its 200-day moving average, there were positive returns seven times during the six months following the signal.
He wrote six months ago that “regardless of the fundamentals, there would be a sharp rally” because the market had, in effect, overshot. Hyperdynamics Corporation is a Top Pick for 2011. I am personally waiting for Hyperdynamics to announce some kind of big news in the next few months which will push the boutiques out of this sideways trading pattern. Be careful with these stocks though, this looks like typical buy the rumor sell the news, some of these stocks are up 50% in a week and they have been predicting Obama to win for months now. These selected musings don’t sound like the dogmatic assertions of a single-paced quantitative modeler (we believe in X, whether X is quality companies, low P/E, P/B, etc.) but possessing of situational awareness. Morningstar rates this large cap growth fund with only two stars. The fund is up 6.6% YTD to April 9, or 11% ahead of the S&P 500. Lange appeared to have achieved these returns with a combination of bets on emerging markets, interest rates and good stock picking. When I reverse engineered FMAGX’s macro exposures, the turnaround in performance was surprising as portfolio manager Lange was aggressive in his market beta, or market timing bet.
A glance at the top holdings of FMAGX shows the top holding to be Corning Inc (GLW), which occupied 7.6% of the portfolio and was up an astounding 59% YTD. It is advised to make a list of the top three vehicles that meet your needs and the ones that fall within your budget. The way you get to the top of these behemoths is to be better technically and play the right political games, just as the way you get to the top of an investment bank is to be the better revenue producer without an understading of the bigger issues. There is no other investment vehicle capable of producing their potential returns. The deal allows Amazon to access BlackBerry’s IVY platform, providing improved data collection for all the information gathered by vehicle sensors. This allows you to analyze important data that is being computed by your software. Morningstar reports that FMAGX had 21% of the fund exposed to foreign stocks. FMAGX has had a consistent overweight exposure to emerging market stocks. The right kind of market exposure? Fortunately, it seemed to be the right kind of exposure.