Investing/Trading Insights
This web site presents models, research summaries, analyses and reviews designed for objective, unique and concise value to serious individual investors and traders, financial advisors and fund managers - a modicum of actionable conclusions found in a very noisy environment. The default approach is to challenge any and all conventional market wisdom with analytical skepticism.
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Latest Market Projection
Projected changes in S&P 500 index as of the market close on 3/17/10...
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 17, 2010 - Update: The "Best" Equity Risk Premium
What are the different ways of estimating the equity risk premium, and which one is the best? In the February 2010 update of his paper entitled "Equity Risk Premiums (ERP): Determinants, Estimation and Implications - A Post-crisis Update", Aswath Damodaran offers a comprehensive overview of equity risk premium estimation and application. Using data from multiple countries (but focusing on the U.S.) over long periods, he concludes that:
For the full blog, go to
Blog - Investing Notes.
Recent Guru Forecasts
3/15/10 - Price Headley: ...common sense says after 7.8% gains over...five weeks, the tank’s got to be close to empty. Be very cautious as the S&P 500 continues to test new highs.
3/15/10 - John Hussman: ...fully hedged at present... This is the most defensive position the Fund has held since the 2007 peak. ...we currently observe conditions that have previously been followed by market declines of 10% or more within a period of several weeks... ...strenuous overvaluation, strenuous overbought conditions, and hostile yield pressures.
3/14/10 - Bill Cara: ...we might not have long to see a sell-off scenario play out.
3/14/10 - Marc Faber: I would rather be lightening up on positions in the next couple of weeks than heavily buying in here.
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.
3/5/10 - 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.
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.
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