Mid Cap Manager’s Rules-Based Method Produces Strong Results

Barron’s reports on mid-cap fund managers Neil Hennessy and Brian Peery, who manage Hennessy Cornerstone Mid-Cap 30. Peery says, “A lot of financial advisors don’t allocate in the mid-cap space, which gives us an advantage.” Mid Caps have outperformed Large and Small Caps over 10, 15, and 20 years, and the Cornerstone Mid-Cap fund has beaten 86% of its peers. Hennessy and Peery take what Barron’s describes as “a fairly strict, rules-based approach to constructing their portfolios.” They annually construct a portfolio in which each stock – selected based on price/sales ratio, annual sales, and rising share price – constitutes […]

A 10-Year Bull? Yes, Says Hennessy

While many pundits are saying that the recent market turnaround won’t last, Neil Hennessy, chief investment officer of Hennessey Funds, says they’re wrong. In an interview with Yahoo! TechTicker, Hennessy says he thinks we are at the start of a 10-year bull market, and that the Dow Jones Industrial Average will double by the time it’s done. A couple key reasons he cites: low interest rates that make stocks far more attractive than government bonds, and large amounts of cash waiting on the sidelines.

Cash-to-Stock Market Ratio has Leuthold Group Bullish on Stocks

The amount of cash, bank deposits, and money-market funds ($8.85 trillion) is equal to 74 percent of the market value of U.S. companies, according to this Bloomberg article. The cash-to-stock market value ratio is the highest it’s been since 1990, according to Federal Reserve data compiled by Leuthold Group and Bloomberg. This huge cash hoard has made some professionals, including Eric Bjorgen of the Leuthold Group, more positive about equities. “There is a store of cash out there that is able to take the market higher,” said Bjorgen. “The same dollar you had last year buys you twice as much […]