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  • Deceleration And The S&P 500 [View article]
    Don't be silly. We know, within a fairly small margin of error, how stock prices will change in the future through the end of the year, but we've left the job of determining the exact trajectory they might take up to you, as we're only willing to hold your hand so far.

    All you have to do is figure out exactly how far in the future investors are focusing their attention, and when they might shift their focus from that point to another point of time in the future. Oh, and which other point of time in the future that might be. Once you've done that, the rest of the forecasting job becomes really easy - like shooting fish in a barrel.
    Nov 10, 2015. 08:33 AM | Likes Like |Link to Comment
  • Dividends: 2015-Q4 Off To A Bad Start [View article]
    We have a follow on article that spells out exactly which entities announced dividend cuts in October 2015:

    The original article is at our site, which displays the table with the information in the web-friendly format we originally presented:
    Nov 3, 2015. 08:43 AM | Likes Like |Link to Comment
  • The October Effect In 2015 [View article]
    Yes and no. A rather large number of companies bank on big, end-of-the-calendar year performances, where it is not until the earnings season in the fourth quarter that they announce if they expect to hit, surpass or miss their projections.

    A good case in point is Caterpillar, which is actually getting ahead of the upcoming year-end earnings reporting curve in altering their projections going forward today (24 September 2015).
    Sep 24, 2015. 12:28 PM | Likes Like |Link to Comment
  • Quantum Random Walks And The S&P 500 [View article]
    It looks like SA's editors just took a screen shot of our animated chart - you can view it in motion at our site:
    Aug 31, 2015. 10:01 AM | Likes Like |Link to Comment
  • Summer 2015 Snapshot Of Expected Future S&P 500 Earnings [View article]

    Answering your questions:

    1) As-reported earnings.
    2) We don't follow Thomson Reuters' reported earnings, so we cannot offer an opinion.
    Aug 26, 2015. 04:31 PM | Likes Like |Link to Comment
  • The Revenge Of The Noise Of Summers [View article]
    Following the "losing streak in the S&P 500" link we provided:

    The longest losing streak recorded over this period of time lasted twelve consecutive trading days, which began after it peaked on 21 April 1966 and lasted through 9 May 1966.

    The timing of that longest losing streak roughly corresponds to the fallout from the Fed's decision on 12 April 1966 to begin "'restricting' rather than 'moderating' the growth in the reserve base, bank credit, and the money supply" available to the U.S. financial system, inaugurating a prolonged period of increased distress for the U.S. economy. That distress was indicated by the reversing momentum of the S&P 500 index, where it coasted on its previous upward inertia to top at 92.42 on 21 April 1966, after which it entered into a general period of decline until it finally bottomed at 73.20 on 7 October 1966, some 20.7% below its previous peak level. It would not recover to that former peak until 27 April 1967.
    Aug 25, 2015. 03:38 PM | 1 Like Like |Link to Comment
  • Growing Calm Or The Calm Before The Storm? [View article]
    WeMustResist: We wouldn't describe our cumulative dividend cuts by day of quarter chart as forward looking, as its really communicating the relative health of the market in real time.

    We have other tools for looking forward:

    All you need to do to figure out where stock prices are going is to determine how far head in time investors are looking. The chart linked above shows how stock prices would be different based on which future quarter they focus upon.

    But then, that's because stock prices are just a simple quantum kinematics problem!...
    Aug 18, 2015. 08:07 AM | Likes Like |Link to Comment
  • Growing Calm Or The Calm Before The Storm? [View article]
    swisspete: Good questions! Those levels are based on our correlation of weak or negative economic growth quarters in the U.S. with the announced dividend cuts documented in S&P's Monthly Dividend Report, which you can access through their S&P 500 page, under the "Additional Information" drop down menu.

    The following site shows both the full time series and the previous edition of our cumulative dividend cuts by day of quarter chart (which we developed to get a more real-time reading on the state of the U.S. economy):

    Because of the limited amount of data, which only goes back to January 2004, the levels we present should be treated more as rough guidelines rather than definitive thresholds - there's definitely some gray areas (or rather, orange) for making a clear call.

    There are two things that all investors should know about dividend cuts:

    1. They are very painful to the owners and managers of the companies (often the same people) that announce them, because it directly cuts their income and are almost invariably accompanied by drops in the value of the stock they own, which directly cuts their wealth.

    2. A company needs at least one of two things to make good on their promised dividend payments: positive earnings (or profits) and positive cash flow. If both of these things are missing, it's a clear indication that they have misjudged their business situation and need to make changes to remain solvent or to restore their solvency.

    While these factors may be influenced by business/economic cycles, they are not influenced by things like the age of the companies or whether other companies are maintaining or increasing their dividends (stopping dividends is the same as cutting them.) Given the pain factor involved, dividend cut announcements perhaps provide the clearest signal of where distress is occurring within the economy/market.

    In fact, if we were asked what one bit of economic data is the most valuable to know for telling us how the market or economy is doing today, we'd want to know how many companies have cut their dividends within the last 30 days. It's perhaps the best real-time indicator of the relative health of the economy.
    Aug 17, 2015. 09:46 PM | 3 Likes Like |Link to Comment
  • Winning Streaks And The S&P 500 [View article]
    We're just getting our feet wet with the data - we'll be returning to it periodically in the future (where you've provided some interesting suggestions!)

    We thought the generic data on winning and losing streaks was interesting in and of itself, and is something that we plan to turn into a tool, where calculating the odds of a particular streak enduring for a given number of days might also be of interest.

    We should note that tool is unlikely to be selected by SA's editors to be featured here. It will however be available on our site, and since we've included the math on which it will be based in these articles, is something that anybody with sufficient math skills can do on their own if they want to get a jump on us!
    Aug 14, 2015. 10:55 AM | Likes Like |Link to Comment
  • A New Phase For The Second U.S. Housing Bubble [View article]
    Only for those afflicted with anosognosia.

    Everyone else, and we do mean everyone else, would simply recognize it as an updated observation on the state of the U.S. housing market.
    Aug 4, 2015. 09:38 AM | 1 Like Like |Link to Comment
  • A New Phase For The Second U.S. Housing Bubble [View article]
    DonPaul-O asked:

    "What are we supposed to do with it anyway?"

    If you cannot figure it out, despite our holding your hand, we are not inclined to help you.
    Jul 31, 2015. 12:20 PM | 1 Like Like |Link to Comment
  • A New Phase For The Second U.S. Housing Bubble [View article]
    Dean Mitchell wrote:

    "I don't understand how you can call this a bubble?"

    It might help if you familiarize yourself with the definition of what a bubble is:

    For housing, we would want to use rent as the representative of the income that might be otherwise earned from owning a house, but there isn't any data reporting median rent for the nation on a monthly basis. Fortunately, there is an extremely strong relationship between what people pay to live in houses and their before-tax income, which allows us to substitute income for rent in our analysis. You can find out more about that relationship at the following link:

    We found your following comment to be really weird:

    "You show charts that indicate New home prices that a rising faster than median incomes, then make the comment that builders have stopped building for the lower income segment."

    If you had bothered to read just one paragraph further than you apparently did, you would have discovered that we also said:

    "That second phase now appears to have lasted up until February 2015. A third phase, in which U.S. homebuilders would once again appear to have begun producing a larger number of new homes for the lower end of the market, with the results of that change in business strategy beginning to show up in the national level data after February 2015."

    We'd offer additional comments on the rest of whatever it was that you wrote, but opted to follow your example and stop reading them after the first paragraph.
    Jul 30, 2015. 03:46 PM | 2 Likes Like |Link to Comment
  • A New Phase For The Second U.S. Housing Bubble [View article]
    Whoops! You would seem to have missed the biggest changes in the U.S. housing market in the past year. If it helps, you might want to investigate the specific strategic changes that homebuilders like D.R. Horton, Lennar and Pulte Homes have implemented, where they have increased their sales by specifically producing much less expensive homes aimed at the broader market.

    Then again, perhaps you're not familiar with these particular builders. If it helps, see:
    Jul 30, 2015. 03:34 PM | 1 Like Like |Link to Comment
  • A New Phase For The Second U.S. Housing Bubble [View article]
    "I find the omission of any reference to interest rates or other expenses of owning a home to be the most glaring error. In the real world, it's the average Joe's monthly cost of owning vs actual take home pay that matters."

    You must live in a very odd world, because those things make very little difference in what people actually pay to live in a home.

    For at least every year since 1984 (as far back as the data goes), the average amount that Americans pay to live in a home (incorporating all their expenses for doing so), regardless of their income, is about 10.4% of their income before taxes, plus or minus ~1% for any given year. That tiny variation from year to year is all the difference that might be attributed to the factors you claim are somehow important.

    Also, if it helps clear up any confusion you may have regarding our obligation to produce "actionable information" for you, the last we checked, you have not provided any payment for us to do so. Since we will not accept any payment from you, you can expect that we will continue not producing any actionable information for you.
    Jul 30, 2015. 03:26 PM | 2 Likes Like |Link to Comment
  • The S&P 500 And Stock Buybacks [View article]
    Much appreciated, James!

    For the article, the bottom line is that we're pretty much stuck with it, as it's been picked up and republished in several places, which would make retracting it or a significant edit pretty ineffective. Our best option is to follow through on our plans are to follow it up, where we'll also point out why our analysis isn't applicable to the index in real life. We'll likely target next Monday, since that's our heaviest traffic day.

    In the meantime, we'll see if we can't prompt some other analysts whose insights we follow to offer their two cents. The curious thing is that the early feedback we're getting from general readers is running about 80-20 in favor of the premise, which suggests that the so-called "buyback effect" has got a hold on conventional wisdom.

    Not that we haven't taken that on before!...
    Jul 27, 2015. 09:26 PM | Likes Like |Link to Comment