WHAT THE MARKET WANTS: July 2008

24 Jul 3:51am
WHAT THE MARKET WANTS: July 2008
Financials Lead the Market Lower -- Again

The market picked up right where it left off in the latter part of May and endured one of the worst months on record amid persistent worries regarding the fallout of the credit crisis and its lingering effects on the global economy. Add a weak dollar, higher oil prices, a discouraged consumer, inflationary pressures, geopolitical flare-ups . . . you get the picture, not very pretty.

Investors had no place to hide as all indices posted steep losses for June, ranging from 6.0% for the Russell 2000 Growth Index to 11.1% for the Russell Microcap Value Index. The DJIA swooned 10.2% (its worst June since 1930) and fell to fresh 2008 lows, posting its biggest quarterly decline (-7.4%) since 1970.

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sabrient

Sabrient Systems LLC, headquartered in Santa Barbara, CA, is an independent equity research firm catering primarily to institutions, money managers, and hedge funds. We employ a computer-driven, fundamentals-based quantitative methodology that adapts to evolving market preferences to identify stocks that appear poised to outperform or under-perform the market. Sabrient's strong performance, quality reports, and broad coverage have made us a primary independent research provider (IRP) in the Global Research Analyst Settlement. Through a competitive process, several major brokerage firms including Lehman Bros, Bear Stearns, Deutsche Bank, CSFB, UBS, and Thomas Weisel have selected Sabrient's weekly reports for distribution to their clients. All told, 7 of the 12 settlement parties are employing Sabrient's research! Moreover, we were selected for E*TRADE's new independent research initiative which was just launched in December. We not only provide weekly reports on their defined universe, but also various sets of actionable stock picks for specialized themes. The Sabrient methodology was developed by an experienced research team led by David Brown, a former NASA scientist and retired CEO of Telescan (and designer of its premier stock search program, ProSearch). Employing a scientific approach, the team has created a library of robust, multi-factor filters, each targeting a key area of traditional stock analysis: value, growth, and momentum. Through a dynamic/adaptive process, Sabrient continually monitors them to ensure that the best performing filters are at work. ROBUST RESULTS Sabrient is now participating on the Investars site (http://www.Investars.com), which rates the relative performance of research providers. Looking at the net returns of both buy and sell ratings across our entire coverage universe over the past year, Sabrient consistently ranks in the top quartile out of 46 research firms covering more than 500 stocks (including firms with unaudited ratings). According to Willy Ballmann and Tan Lien Seng of SHK Fund Management Ltd., "Thanks to today's abundance of computing power and extensive financial databases, a quant model can monitor and analyse many more stocks in a systematic fashion than any human analyst ever could. Therefore, a quant model's main strength lies in the disciplined process of applying a small edge repeatedly to find as many independent investment opportunities as possible. The resulting broad diversification increases the chances of achieving superior risk-adjusted returns." (source: EurekaHedge - Hedge Fund Monthly) And Sabrient accomplishes this quite well. Our picks have consistently beaten the market benchmarks, and in fact, our micro-cap growth picks have beaten their benchmark by an average of 42% per year! Our approach works well across all market caps. Whether you prefer large, mid, small, or micro-caps, Sabrient's selections can help add alpha to your portfolios. But, in particular, if you are looking for the best small and micro-cap stocks, which are largely uncovered by Wall Street, this is where our scientific, computer-based, quantitative approach works best! We routinely uncover those proverbial diamonds in the rough. (Visit our website for more performance data.)