Out of Sample World

May 24, 2013

This is the second time we have featured Cornerstone Macro is relatively short order. Their fine research will go to clients only soon, so be sure to sign up for their distribution list…A quick quote before the download:

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“In the report today, we discuss the peculiarities of the current financial market environment. The most glaring difference between the pre-08 world and today is the length of market cycles. As the table above highlights, the average length of a “risk on” or “risk off” move for much of our careers was well over a year. Nowadays, we can expect such a phase to last just a little over two quarters. In fact, we have seen four full cycles since 2010 alone. We believe we are currently in the very early innings of a “risk-on” phase. In fact, dating it by the performance of factors like beta or profitability would make this latest incarnation of the market about three weeks old. As such, it is fair to expect the recent preference for cyclicality to last for much of this year. Our favorites remain Financials, Industrials and Technology. As always time will tell. ”

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