NEW YORK (Dow Jones)–Mean Market making you miserable? Look overseas.
As U.S. stocks closed Wednesday at three-month lows, the Mean Market – my name for stocks’ prolonged sidewinding shuffle marked by the Dow in the 10,000s – appears to have decided to torture the bulls again.
Several readers have pointed out that at 10,317, the Dow Jones Industrial Average is suddenly dramatically closer to a sub-10,300 close, which the Elliott Wave Financial Forecaster has written would mean a bearish resolution of the interesting two-year “diamond” chart formation it thinks it has detected in the blue-chip benchmark.
The folks at Elliott Wave are talking about a breakdown to the 7,000 range.
Meanwhile, foreign markets have been doing well, especially in Asia. Indeed, Morgan Stanley’s Europe Australia Far East Index is up some 55% over the last two years, some 10 times the Dow’s gain.
One newsletter, in particular, is benefiting from this foreign fling: Vivian Lewis’s Global Investing.
According to the Hulbert Financial Digest’s monitoring, Global Investing portfolios have gained on average 39.2% over the last 12 months, more than double the 15.8% for the dividend-reinvested Dow Jones Wilshire 5000.
And over the last five years, Global Investing’s portfolios appreciated on average at an annualized rate of 9.2%, versus an annualized minus 1.6% for the DJ Wilshire.
Ironically, the HFD started following Global Investing in 1994, just after the last major surge in foreign stocks. The subsequent underperformance of foreign markets was so marked that Global Investing’s portfolios are still behind the benchmark index over the entire period.
But that was then. This is now.
What Global Investing omits from its commentary is almost as interesting as what it includes. For one thing, there isn’t much discussion of interest rates.
Nor does there seem to be much of an overall theory of what’s going on in the world, although editor Lewis does allow herself some tart remarks about the French. To wit: “The hysterics about kangaroos hopping on the autoroute [a reference to Macquarie Infrastructure’s attempt to bid for a privatized French highway] show that France wants global investment to go in one direction only: outward from France.”
Instead, Global Investing consists of a great deal of detailed, fundamentally oriented news and commentary about the rather large number of stocks and closed-end country funds that the service follows.
For example, the explanation for one recent pick for Global Investing’s Speculative Portfolio – Koninklijke Wessanen (39530.AE), the Dutch health- and premium-food company – ranges over accounting, regulatory and marketing issues. Global Investing ends bracingly regarding the company and its shares:
“The best-laid marketing plans can go astray. This royal [a reference to Wessanen’s original royal charter] is riskier than KPN (KPN) [the Dutch telephone company, which GI also likes]. Health food is a racket. While there are labeling systems for marketing naturally produced foods, both government and private, the food business is industrialized…Bio d’Amour, a French supermarket brand, is identical to Grandeur Nature sold at a premium in health stores.”
All that said, Global Investing’s Speculative Portfolio gained by 66% in the last 12 months and by 37% annualized over the last five years.
It included, as of the September issue, these stocks: Canada’s Dundee Precious Metals Inc. (DPM.T); Mexico’s Corporacion Geo (CGEO.MX); Novogen Ltd. (NVGN); Johnson Matthey PLC (JMAT.LN); Austria’s BWT AG (BWT.VI); S&T System Integration & Technology S&T AG (SNT.VI); India’s Infosys Technologies Ltd. (INFY); Orezone Resources Inc. (OZN); M-Systems Flash Disk Pioneers Ltd. (FLSH); Airspray NV of the Netherlands (33355.AE); YM BioSciences Inc. (YM.T); Hungary’s OTP Bank RT (OTP.BU); DeCode Genetics Inc. (DCGN); and Crucell NV (CRXL).
-Contact: 415-733-0500
Source: Yahoo News Singapore
Photo credit: Michaela Loheit via Visualhunt.com / CC BY-ND
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