Value Line

[Dude]

Hi all,
I belong to a stock investment club which purchases an annual subscription to Value Line Investment Survey.  I usually read the "Selection & Opinion" publication that comes out each Friday, specifically the "economic and stock market commentary" section on the front page, for their take on where the stock market is headed in the future.

I got to wondering.....back in the year 1999, before the market "crash" of 2000-2001, was Value Line recommending to limit exposure to the stock market?  I'd be curious to know the tone of their weekly stock market commentary back then.  Maybe the library will have back issues that far back.  Anybody follow Value Line?  Do they have a good record of predicting crashes?  Thanks.

 

[haha]

Hi all,
I belong to a stock investment club which purchases an annual subscription to Value Line Investment Survey.  I usually read the "Selection & Opinion" publication that comes out each Friday, specifically the "economic and stock market commentary" section on the front page, for their take on where the stock market is headed in the future.

I got to wondering.....back in the year 1999, before the market "crash" of 2000-2001, was Value Line recommending to limit exposure to the stock market?  I'd be curious to know the tone of their weekly stock market commentary back then.  Maybe the library will have back issues that far back.  Anybody follow Value Line?  Do they have a good record of predicting crashes?  Thanks.

Pay no attention to the descriptive text. Value-Line does however have an excellent long term record of making long term successful prospective market calls. On page 1 of the thin sheet (the one that contains the index) there is a box that gives the "Median potential gain 3-5 years out" of the ValueLine Universe of stocks. My wording may be somewhat off, but I got Value Line back in the 70s, and for a time in the 80s. They are too optimistic, but some academic who I cannot remember did a transform on their median gain number which turns it into a very good predictor. Right now they are predicting a 40% gain, which is quite low in the distribution of predictions over the years. I am not sure, but I think back in 74 near the bottom they were predicting >200 % gains.

I was long gone from market exposure (except some special situations) so I don’t know what they were saying in 2000, but I would guess it was less than 40%. If you find out, please let us know. I believe at the bottom in 2002 they were calling for about. 115% gains, but it might have been a bit higher.

http://www.valueline.com/why_use_potential.html

But of course, there is absolutely no reality to market timing, so you had better ignore this post.

Ha

 

[Dude]

Thanks Ha, appreciate the info.  I did find this article which has a graph of the VL Appreciation Index from 1992-2004.....looks like it was about 80 at the beginnings of 2000 and 2001.

www.weedenco.com/goldie/goldie/sv072303.pdf

 

[haha]

Dude, interesting paper. One thing to remember is that the Value Line 1700 stocks did not correlate very closely with the S&P, or especially with the NASDAQ during the big bubble 98-2000. They were out of sync, and in fact the peaks in the nas 100 offered good buying opportunities in many of the secondary stocks covered by Value Line.

Ha

 

[brewer12345]

Dude, interesting paper. One thing to remember is that the Value Line 1700 stocks did not correlate very closely with the S&P, or especially with the NASDAQ during the big bubble 98-2000. They were out of sync, and in fact the peaks in the nas 100 offered good buying opportunities in many of the secondary stocks covered by Value Line.

Ha

Yup, I was buying stuff embarassingly cheap in 99 and 00 as the market war peaking because the raly was all concentrated in the big name tech stocks. Otehr stuff was going for a song.