FYI: By virtually any measure, U.S. stocks are expensive. Under one especially harsh lens, the cyclically adjusted price-earnings ratio popularized by Robert Shiller, equities relative to 10 years of profits are more stretched than any time in a century, save the dot-com era.
But there’s still a methodology that bulls can take comfort in -- price not just to earnings, but to earnings growth. Favored by legendary investor Peter Lynch and known as the PEG ratio, the technique takes the standard valuation snapshot and adds time -- time for a stock to grow into its price.
Regards,
Ted
https://www.fa-mag.com/news/forget-cape-ratio--peter-lynch-tool-has-s-p-500-getting-cheaper-36555.html?print

@psuche98: Here are 102 MCG Funds ranked by U.S. News & World Report.
Regards,
Ted
https://money.usnews.com/funds/mutual-funds/rankings/mid-cap-growth

The stats are only up to 2012.

PRDMX is NTF at Fidelity. Not presently open at Fidelity. May be open directly at TRP.
A few other suggested by Fidelity:

https://fundresearch.fidelity.com/mutual-funds/summary/779585108?type=sq-NavBar

FYI: With U.S. stocks seeming to hit records by the day, perhaps its no surprise that investors are piling into risk assets in a nearly unprecedented way.
In the latest measure of optimism, TD Ameritrade’s Investor Movement Index rose to 8.59 in December, its second straight monthly record. The index measures the behavior of TD Ameritrade clients, aggregating their positions and activity to measure how they are positioned.
Regards,
Ted
https://www.marketwatch.com/story/retail-investor-exposure-to-stock-market-is-at-an-all-time-high-td-ameritrade-2018-01-08/print

FYI: S&P 500 sector weightings are important to monitor. Over the years when weightings have gotten extremely lopsided for one or two sectors, it hasn’t ended well. Below is a table showing S&P 500 sector weightings from the mid-1990s through 2012. In the early 1990s before the Dot Com bubble, the US economy was much more evenly weighted between manufacturing sectors and service sectors. Sector weightings were bunched together between 6% and 14% across the board. In 1990, Tech was tied for the smallest sector of the market at 6.3%, while Industrials was the largest at 14.7%. The spread between the largest and smallest sectors back then was just over 8 percentage points.
The Dot Com bubble completely blew up the balanced economy, and looking back you can clearly see how lopsided things had become. Once the Tech bubble burst, it was the Financial sector that began its charge towards dominance. The Financial sector’s sole purpose is to service the economy, so in our view you never want to see the Financial sector make up the largest portion of the economy. That was the case from 2002 to 2007, though, and we all know how that ended.
Unfortunately we’ve begun to see sector weightings get extremely out of whack once again.
Regards,
Ted
https://www.bespokepremium.com/sector-snapshot/bespoke-sp-500-sector-weightings-report-january-2018/

FYI: State and local governments around the world are looking to publicly traded companies to build out wireless, water and other infrastructure.
Regards,
Ted
https://www.marketwatch.com/story/infrastructure-stocks-can-be-solid-investments-even-if-trump-doesnt-get-his-way-2018-01-08/print
M* Snapshot PGUAX:
http://www.morningstar.com/funds/xnas/pguax/quote.html
Lipper Snapshot PGUAX:
https://www.marketwatch.com/investing/fund/pauax
PGUAX Is Unranked In The (I ) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/infrastructure/virtus-duff-phelps-global-infras-fund/pguax

FYI: Hedge funds grew from a boutique investment area serving wealthy individuals and families to a full-blown institutional phenomenon after Yale and CalPERS gave credence to the category. Cryptocurrencies are on the same path, awaiting that institutional first-mover.
Regards,
Ted
https://www.institutionalinvestor.com/article/b15yvqk5zz52wp/when-will-yale-buy-bitcoin

@Old_Skeet. I need to understand what you are doing more. I tried doing some sector trading in 2017. I lost a little on many trades, but earned a lot on few trades and was net positive. However, I decided to take a step back and stop. Unfortunately for me my "model" would have had me in XLE from November if I had stuck to it :-(
Frankly, after my recent accident my priorities also changed. BTW, all I turned 50 recently and realized I was 10 pounds overweight. So instead of buying / selling I'm pondering my weight and health right now for a bit.

Hi again @VintageFreak.
Let's go back to the 500 Index compass. It is comprised of the major sector etf's. In portfolio manager I follow these tickers plus EQL which is an equally weighted sector etf and serves as my bogey. If you want to beat the bogey you have to be in the sectors performing above the bogey and out of those that trail it. With this I choose the three that are performing the best for the time period I have chossen (usually the three month time frame for the spiff). These three become my lead pack and within the pack there is a lead etf (hound). This etf becomes the spiff "money" hound so to speak and remains the money hound as long as it can remain a member of the lead pack. Sould it falter and unable to keep pace with the pack then the spiff is closed and a new lead hound is choosen with a new spiff being placed. It's a momenutm strategy. I'll be posting weekly on it for a while anyway. After a while it will beome "old news" and the postings will fade.
So follow along ... Let's see how Old_Skeet did in week one.
Week one results. The current lead 90 day hound XLY as the year began had a starting value of $98.69. Thus far it is up 3.13% and remains a lead 90 day pack member. The other two are XLE (up 3.75%) and XLK (up 3.67%) for the week. EQL the bogey hound is up 1.64%. XLB is closing fast on the lead 90 day pack (with XLI & XLF close behind) and might one or more may soon become a pack member of the current lead hounds being removed and perhaps a new lead hound taking over (spiff hound). We want know this until market close Friday the 12th when the weekly results get tabulated.
Starting week two the lead pack remains the same with XLY the spiff hound.
Can XLY maintain the pace? Will there be a new lead hound? Will there be a new lead pack? Perhaps.
So stay tuned.

@Old_Skeet. I need to understand what you are doing more. I tried doing some sector trading in 2017. I lost a little on many trades, but earned a lot on few trades and was net positive. However, I decided to take a step back and stop. Unfortunately for me my "model" would have had me in XLE from November if I had stuck to it :-(
Frankly, after my recent accident my priorities also changed. BTW, all I turned 50 recently and realized I was 10 pounds overweight. So instead of buying / selling I'm pondering my weight and health right now for a bit.

In my lifetime I been through a number of these selling stampedes in the ... 70's ... 80's ... 90's ... 00's ... 10's with some leading into a recession. With this, here is what I have observed. Stock market swings are part of investing. If the 500 Index would decline 10% form current valuation of 2743 that would bubble somewhere around 2470 (reasonable). Beyond a 10% decline look for a good number of margin calls to kick in so expect a 15% to 20% decline (coming pretty quickly) and that would bubble somewhere around 2330 to 2200 (concerning). Also, expect days to cover to keep rising as big money shorts. Beyond that more margin calls kick in as the selling stampede continues as some investors fail to meat their margin calls and their positions get sold out. By then big money starts to close out short positions (days to cover declines) and they should now start to buy back in as the little retail guy and weak sells out in the downdraft with stocks becoming oversold. After big money has established their buy back in positions now the little retail investor follows usually buying at a higher value than when they sold. So, just sitting for some is a strategy in of itself ... but, this takes a strong constitution to do this and not play big money's game through their shorting and sell down programs. This most often causes the weak and little mom and pop retail investor to sell out as they can stand no more paper losses. Hear the noise but watch what the big money investors do. Towards the end of the crash they then start to buy. And, if you have not sold out you will begin to see the value of your portfolio begin to rise and you can also begin to do some buying yourself as you deploy cash (hopefully built over time and not during the selling stampede) averaging back in.
My plan ... Living within my means is step 1 of my plan with little or no bebt. Being diverisfied within my risk tolerance is step two along with being mindful of asset values. Maintaining a sizeable cash position (built over time) is number three especially during periods of high stock market valuations. Having a sell down plan once stocks hit correction territory (if felt warranted) is number 4 by watching days to cover for short positions for SPY increase. And, finally, have a buy back in plan for the rebound is number 5 while good value exist and the market is oversold. If it was worth buying at 2743 and above then it's worth buying at 2470 and below.
As a guide, I like to see the days to cover short positions in decline. In short, work the market by not letting it work you. Have a plan and follow it; but, be flexible and revise when warranted. Most of all I tray to stay calm knowing I've got cash and I can begin to work on finding my buys while others are looking to see what they will sell during the selling stampede. Things worked well for me during the last stock market selling stampede that started in late December 2015 through January of 2016 and ended in February. It followed pretty much as I scripted above. After the 500 Index hit the 10% threshold I begin to buy in steps as the stampede continued thus averaging my buys. During the downdraft I bought three times and on the upswing twice. Here is what Jeffrey Saut of Raymond James had to say about the last selling stampede.
https://www.cnbc.com/2016/02/01/selling-stampede-ended-last-week-saut.html
My take away ... Three consecutive updays ends a selling stampede.
I wish all ... "Good Investing."
Old_Skeet

This is the post of savannahboy from InvestorVillage ( I follow his predictions for a long time and found them rather accurate):
One of the benefits to posting is that it forces you to think about what you're
going to say. In my case, my "Break Out (3) post forced me to think more about
an exit plan if I need one in 2018. Based upon my psychological make-up, my
exit plan needs to be relatively simple with some clear-cut "If-then" triggers
for expanding or contracting stock market exposure. I usually react much better
to volatility, if I've already planned for it.
After some rumination this weekend and listening to a helpful interview with
Ed Hyman, one of the great economists and market strategists, I've decided that
the market is in the midst of a melt-up that necessitates having an exit plan.
http://wealthtrack.com/1-economist-hyman-leading-value-manager-mclennan-discuss-economic-surges-super-bull-markets/
If so, then for 2018, I'm going with the following triggers in my exit plan:
1. If the yield curve inverts, the yield on a 10yr Treasury exceeds 3.0%, or
my portfolio reaches a certain amount (reflecting about a 12% increase in
the S&P 500 Index from 12/31/17), then I'll sell 20 of the 30 stocks in my
portfolio, which will leave the portfolio roughly 70% in cash, 26% in mostly
defensive, dividend-paying stocks and 4% in two spec stocks that I'm expecting
to do well in 2018 regardless of the market. I'll redeploy the cash after the
next bear market when the health care stocks start to recover (since I've found
that a rally in this sector often marks the low in bear markets).
2. If none of the conditions in no. 1 above have occurred by 6/30, I'll sell
the 9 stocks in my millennial group throughout July, leaving the portfolio roughly
30% in cash, 33% in chips, 33% in defensive stocks and 4% in spec stocks.
I'll redeploy the cash back into the millennial group with possibly a few
changes in stock selection if the Republicans retain control of Congress
after the mid-term elections (after which I'll be 100% invested) or go to 70%
in cash if the Democrats win. Of course, if one of the conditions in no. 1
above occurs at any time in 2018 or 2019, then I'll sell the stocks in the
millennial and chip groups, moving to 70% in cash as per no. 1 above.
Each investor should have his or her own exit plan based on his or her risk
tolerance, age, investment horizon, unrealized profits in the portfolio, etc.
I'm sharing my plan with the board for whatever value that might have to other board
members. Remember, nobody rings the bell at the top, although there are
certain tells that often signal a recession (and bear market) is coming.
GLTA! Savannah
https://www.investorvillage.com/smbd.asp?mb=10677&mn=20928&pt=msg&mid=17857086

“... it was clearer than crystal to the lords of the State preserves of loaves and fishes, that things in general were settled for ever.” (Dickens)
I’ve pretty much stopped reading / listening to most market commentary. And I’d have a hard time advising a young person just starting out investing today to throw money at this thing. It’s human tendency to expect whatever the current trend is to continue into the future indefinitely (be it up or down in the markets). So the euphoria is understandable. Now, if you think we can keep paying little old widows 1-2% on their savings while we “geniuses” rake in in 15-25% equity gains year after year - I’ve got a bridge I’ll sell.
@PBKCM - I did catch your point recently regarding inflation and think there’s a lot of truth to that. But at these levels, except for gold and real assets, I’m baffled. Maybe valuations are more reasonable outside U.S.

@Catch22
Yes - refraining from further comment is wise. Old Joe simply doesn’t realize that all of us in Michigan are geniuses (unlike the state of fire flood and quake where no sane person would reside).
But please don’t refrain from posting. You bring a lot to the board.
Regards, (fellow genius) :)
-
Now ya got me going ...
Once upon a time I was deep into country music and PBR. But these days I can’t seem to drink enough beer to appreciate country much (or perhaps it’s the other way around). Your Patsy Cline lyrics (written by Willie Nelson) are a classic. I also agree 100% with your implied take on the markets. But here’s one with both Willie and Patsy that I like even better and occasionally still listen to. Doubt they actually sang it together. It’s likely a dubbed duet. But still a very fine sound - downright chilling.

@Old_Skeet,
I enjoy and appreciate reading you market valuation updates and I came across this chart that values the US Equity Market in terms of US GDP....Market Cap to GDP. A quote from the linked article below:

Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment."

I believe it is an attempt at comparing the historical price of US equities to the historical US GDP data. Here's the historical chart which dates back to the 1970 - today:

I added two "best fit" long term (45 years) trend lines with a 20% channel between the lower trend line (red) and the upper (green). What I find interesting about GDP is that it is less speculative than the Equity market and a truer reflection of how well an economy is performing. So, by comparing the two I believe the speculative nature of equity valuation ("are stocks expensive" vs "are stocks it cheap") should reveal itself, at least when compared to what the equity market should be a true reflection of, GDP.
De-trending the data would look like this:

Here's are some other sites that track US Equity Valuation as a percentage of GDP:
https://ycharts.com/indicators/us_total_market_capitalization
Article on this Valuation Matrix:
market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator
Investopedia's Definition of What is the 'Stock Market Capitalization To GDP Ratio'?
marketcapgdp

@MFO Members: Agree with Ron Rowland's current Market Leadership Strategy.
Regards,
Ted
Current Aggressive Holdings:
TRBCX + 4.12% YTD
QQQ + 3.95% YTD
MSOPX + 3.79% YTD

Yes skeet, that is the news letter I was thinking about. Haven't seen it for quite a while.
Your post got me thinking about the comparison between a "leadership" investment style that is proposed by yourself and "Invest-with-an-edge" versus a strategy that really is the opposite, a value strategy seen in DSENX. Very small sample size since DSENX is fairly new, but I can see from the link you attached and from M*'s DSENX performance data that the "buy under-valued sectors" strategy has done much better then "the sectors in favor" strategy. Again, very small amount of data. Both have outperformed the S&P 500 though.
Who knows. That's why I've left it to the fund managers to decide.
Have to go get my Buffalo chicken wings and beer ready for our 1st playoff game in 17 years!!! Some inside tail-gating in this zero degree weather.... GO BILLS.

Hi @VintageFreak,
Thanks for making comment on my Pack and Lead Hound Strategy.
Please know, that the pack is in flux and changes with the movement of the sectors. Currently, the sectors that lead the three month bogey hound EQL are XLF, XLI, XLB, XLE, XLK & XLY (the last three currently making up the lead pack). Within this pack XLY is the current lead hound. Those that trail EQL are XLP, XLV, XLRE & XLU. There will perhaps be another hound added to my 500 Index kennel sometime this year and that is XTL (telecom). In addition to the lead hound strategy I use a pick three (win, place or show) strategy was well.
The 2018 hunt is on ... and, I've got spiff money on hounds in both compasses. And, as the pack and lead hound change so will my money. You can view how the 500 Index sector hounds are running by clicking on the link below.
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Generally, there are daily hunts available Monday thru Friday from 9:30 am to 4:00 pm est (except holidays). Contact your local investment advisor (or broker, etc.) for investment details.
Old_Skeet
Note: I use EQL (an equally weighted sector etf) over SPY as my bogey hound. And, if a hound can't beat the fixed income bogey hound (AGG) then it's for sure a cash out day for it/them.

It's current; CM reports on full-year 2017 equity results as "last year" in the preamble to the program. She interviews these two guys annually.
These are good sessions - wouldn't miss 'em.