Last Friday Nightly Business Report interviewed James Stack, the editor and founder of InvesTech Research. I found out about InvesTech some years ago after reading Fleckenstein rave about their insight. Since then I’ve kept a semi-close eye on it. To be honest, compared to the plethora of newsletters our there, it does seem to be quite good.
InvesTech made a bullish call at the 2002 bottom which won them a lot of kudos and I’m sure many new subscribers. Stack’s approach is a combination of fundamental, technical and liquidity analysis. He doesn’t outright make market calls but you get a sense of his timing by how he allocates his stock and mutual fund portfolios.
He was slightly early but adamantly bearish on the housing bubble and their stocks. Here is a chart that he has kept on his website and updated frequently:
Here are some salient excerpts from the short NBR interview :
- in the past 5 months he increased to 60% cash
- the bull market is very long in the tooth
- believes a cyclical bear market is upon us
- flat yield curve means a high probability of recession
- believes Fed will pause on August 8th meeting
- historically, after the last hike, stocks don’t do well
- he likes Pepsi (PEP) and Johnson & Johnson (JNJ)
If you prefer, you can watch the video of the Market Monitor interview here. But get a move on because it will be replaced by the next interview soon.
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