NEW YORK (MarketWatch) — Very few letters made money during the Crash of 2008. Paradoxically, two of those who did have just abruptly closed.
P.Q. Wall announced this week that he will close his P.Q. Wall Forecast due to health issues. Subscription liabilities will be assumed by Peter Eliades’ Stock Market Cycles and one of Bob Prechter’s Elliott Wave services.
Wall has done this before, but he is now in his late seventies and must be taken seriously. One of the industry’s most colorful characters, he’s had a checkered record. But, ironically, his weird system of charts and cycles seemed to have finally gotten in synch with the market in the last few years. (See June 5 column.)
In his last hotline, Wall wrote: “Our bottom line for long-term investors is unchanged: Stocks are up, buy; stock mutual funds the same. Bonds are up, buy. Gold is up, buy.”
“Look at the 12-year low that began on March 9. We have now mounted upward by a huge 3,049 points on the industrials. From the halfway low on July 8 at 8,087, we are up 1,036 points. So, lazy summer now or not, we are clearly in a whole new four-year Kitchin cycle. Come fall, we expect an earthquake of new bulls.”
I never met the Yamamoto Forecast’s Irwin Yamamoto — judging from the almost complete absence of results when you Google him, very few people did — but I nevertheless felt a real pang when I saw his death, at the shockingly young age of 54, reported this week.
Yamamoto’s personality, revealed in his laconic monthly letters and his adamant refusal to recognize the Internet, was intriguing. His calm, value-oriented buy-and-hold style, in a time of unprecedented volatility and frenetic communications, was radical and daring — and a salutary reminder that many different styles can work in the stock market.
And it was indeed working. Over the year to date through June, Yamamoto was up 14.6% by Hulbert Financial Digest count, versus 4.5% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over the past 12 months, Yamamoto was up 20.4% against negative 26.4% for the total return Wilshire 5000.
But Yamamoto’s record was strong over the long term, too. Over the seven-plus years that the HFD was following Yamamoto, the letter achieved a 13.7% annualized gain, versus 0.2% annualized for the total return Wilshire. (Yamamoto had apparently been publishing since 1983, but reader requests only recently brought it to the HFD’s attention.)
All of this delighted me. I concluded that the HFD’s monitoring method had once again unearthed a winner, wittily dubbing the Hawaii-based Yamamoto “the Maui Tortoise,” and settled down for profitable tacit partnership. (See May 7 column.) I very much regret that this was not to be.
For the record, these were Yamamoto’s last comments earlier this month, explaining his decision to remain only about 35% invested:
“In a strange way, we welcome a test of the March low. Yes, fear should return to the marketplace in that backdrop. Yet the remaining part of the portfolio not presently in equities would be put to work at that juncture. The cash proportion will be fully prepared to acquire shares of corporations which we are tracking at the moment. Furthermore, in all likelihood, additional shares of companies in the portfolio would be bought. Naturally, they must be at discounted levels.”
Yamamoto’s value-oriented conclusion sounds very much like Dow Theory Letter’s octogenarian Richard Russell’s thoughts on the coming bear-market bottom, despite their complete difference in styles — Russell posts thousands of words every day. (See July 27 column.)
Russell recently announced that he’ll be assuming the subscription liabilities of yet another long-established service, details to be revealed later.
We have to be glad he’s still around.
View more information: https://www.marketwatch.com/story/two-survivors-of-the-crash-suddenly-gone-2009-07-31