Is It Over?

Quite possibly. The Bull stated at the outset that this correction was not likely to be all that serious. There was just too strong a business environment for that to happen; so far, so good. What has happened, however, is that the stock market has made a shift in emphasis. Value stocks have come to the fore. Growth is not dead, just not the dominant leadership it has been for over a decade.

Last year, momentum swapped between growth and value several times. At the end of the year, results for each were almost the same. Markets may go through a similar progression this year, but it is more likely that value emerges as the dominant leadership.  Therefore, the Bull and his partners have incrementally moved to include more value names in the strategies employed to meet our clients’ needs.

As the Bull predicted, volatility has gone through the roof. This is especially true on an individual stock basis. When a mega-cap stock can lose one-third of its value in a day because of a lackluster earnings report with tepid guidance, then translate that to many secondary and tertiary equities, you can better understand what has been happening below the surface of the major indices. This is likely to persist. There is a great deal of nervousness among investors, and they often react emotionally. We will all get through this phase; stay steady, my friends.

The Lonely Bull