May 6, 2008 Notes from Annual Meeting of Zweig Funds
Marty Zweig Comments:
1. “Really tough market now.” “Torn right now, could go either way.” “Selling climax in January and March built up pessimism. Rates were cut 7 times. Can make for a Bull Case.” “Bear Case is recession potential could worsen banking system and cripple lending.
2. Investor Sentiment.
A. Investor Intelligence – I need to find a graph and monitor this.
B. AAII Survey – I already use that.
C. Market goes opposite of what the mass thinks.
D. Watch Consumer Sentiment.
E. 1974 had a lot of pessimism.
3. Watch The following metrics:
A. Retail Money Market Funds % of Market Cap. “Some liquidity but is it enough?” I have no idea what my notes mean on this one. I should search the metric.
B. Margin Debt as % of Market Cap – Marty said something like hedge funds us it, hence the number might be fake. Yet he follows it and claims it is “telling.”
C. Unemployment Rate.
D. Junk Bond Spread.
E. Crude Oil Year-over- Year (YOY)
F. Trade Weighted Dollar YOY
G. ISM Prices Paid Index
H. Total Delinquencies %. He felt this was very important.
I. “Typically Median Home Price would be 2.8X Median Family Gross Income.”
4. Random Marty Zweig Mentions:
A. Thinks this credit crunch is worse than 1990.
B. Savings Rate has “been bothering me a long time.” He thinks forced savings will dig into consumer spending. “In the late 80’s the savings rate dropped from 10% to 7% and hovered for years. Then in the late 90’s till around 2005 it went to the 2% range and then it went to its recent rate of 0%.”
C. Thinks home prices will fall a lot further. “I think housing is far from over.”
D. “Gut says this is a bear market rally, but not positive, watch the sentiment.” Side note, I am transcribing this a week or so past the meeting, and if I recall properly Bullish Sentiment on AAII Survey is above normal.
E. I asked if he has a read on the tape. “I will take a stab, but merely just brainstorming, head and shoulder pattern might be forming a top.” “I don’t believe in Dow Theory.” “Takes more positive than negative to move a market. Lately market has been light.
F. Carlton Neal mentioned he thinks, “We are in a bull phase of bear market.”
Here is a link from notes I took on May 10, 2005 May 11,2005