cowboy dickrdoo

May's Rational Exuberance Updated

Rating: 2.00 not yet rated(1 votes)    Vote:

You are logged in as | Logout

First off congratulations to Mr. Kam and company. Marketocracy Masters 100 is now a 4 star mutual fund.

I outlined my strategies in my original post. This is just a monthly size and style allocation update. Even though I careless if no one follows my recommendations I know a lot people do. Unfortunately almost every time I blog I remember something important I forgot to mention in previous blogs.

I haven't been using the actual 10 year bond rates when coming up with my size and style allocations. I have been starting with the actual 10 year bond rate and then just bumping it up until I only have 4 or so boxes. From now on my monthly size and style recommendations will be ranges based upon a 10 year bond rate range.

May's Rational Exuberance Size and Style Allocations

Bond range: 4.40% to 5.4%
Buys:
SP500 Growth (IVW)
Avg. PEx(10yr-.0048)=1.35
Present PE: 18.4
Average PE: 27.54 (5.34% 10yr Bond)
Allocation: 27.21% to 47.76%

SP400 Growth (IJK)
Avg. PEx(10yr-.0048)=1.28
Present PE: 22.25
Average PE: 25.97 (5.34% 10yr Bond)
Allocation: 33.34% to 30.59%

SP600 Growth (IJT)
PEx(10yr-.0048)=1.18
Present PE: 22.77
Average PE: 23.95 (5.34% 10yr Bond)
Allocation: 21.71% to 7.65%

Foreign (EFA)
PEx(10yr-.0048)=0.97
Present PE: 17.98
Average PE: 19.73 (5.34% 10yr Bond)
Allocation: 17.64% to 13.39%

Sells:

SP500 Value ( IVE)
Avg. PEx(10yr-.0048)=0.84
Present PE: 24.56
Average PE: 17.07 (5.34% 10yr Bond)
Allocation: 0%

SP400 Value (IJJ)
PEx(10yr-.0048)=0.79
Present PE: 21.94
Average PE: 16.17 (5.34% 10yr Bond)
Allocation: 0.0%

SP600 Value(IJS)
PEx(10yr-.0048)=0.78
Present PE: 25.99
Average PE: 15.82 (5.34% 10yr Bond)
Allocation: 0.0%

Emerging (EEM)
PEx(10yr-.0048)=0.76
Present PE: 21.41
Average PE: 15.48 (5.34% 10yr Bond)
Allocation: 0.0%

To summarize my may rangy recommendations, if the 10 year bond rate increases significantly move out of small cap growth stocks into large cap growth stocks and if you're in range stay put.

Coming up next a 3-1/2 month back check of size and style, sector and demographic recommendations and maybe a Marketocracy Master grading update but maybe almost always means no.

Yours truly,

Cowboy Dickrdoo

Comments: 0