Category Archives: Daily Top Ten

Topley’s Top Ten – February 28, 2019

1.Earnings Recession Does Not Necessarily Mean Economic Recession

The idea is that an earnings recession would lead to a conventional economic downturn, with rising unemployment, falling consumption and even broader downward pressure on profits — but that’s not actually true, Belski said in an interview.

Indeed, an earnings recession has happened six times since 1987 — but a real recession has followed only twice, Belski said. That alone should mitigate any fears that an earnings slowdown would come back to bite the market, he said.

Furthermore, when earnings downturns happen and economic recessions don’t follow, the S&P has risen an average of 17.6% over the next year, he said, citing the five times this has happened since 1967

Opinion: What ever happened to that earnings recession?By Tim Mullaney

https://www.marketwatch.com/story/what-ever-happened-to-that-earnings-recession-2019-02-27

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Topley’s Top Ten – February 25, 2019

1.Historical Margin Chart.

Margin Call — Margin Debt Accelerometer:  Here’s an interesting chart, basically a bear market warning indicator; the year over year change in US margin debt [note it used to be called NYSE margin debt, but now FINRA publishes a broader set of data].  The basic concept is that when margin debt is contracting on an annual basis it can serve as a bear market warning signal (margin calls and lower risk appetite).  Only thing I would add is that in the 2000 & 2008 experiences there was a substantial acceleration in margin debt growth before the contraction signal was triggered, so one might argue the lack of that acceleration weakens the signal this time around…


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Topley’s Top Ten – February 22, 2019

1.Domino’s vs. Google.

Pizza Pays — Domino’s Delivers Over Google

Feb 21, 2019

If you were sent back in time to 2004 and had the choice to buy Domino’s Pizza (DPZ) or Alphabet (GOOGL) at their IPO, which would have been the better choice?  Due to the epic size and influence of its business, impulse would probably have you choose Alphabet.  But DPZ has actually seen significantly better returns than GOOGL since the companies’ IPO dates. Since inception, DPZ has seen a total return of 3,604% even after today’s 9.03% decline in the stock in reaction to an earnings miss this morning.  Not that GOOGL’s 2,490% return is something to turn your nose at, but it is dwarfed by DPZ’s returns.  For the stocks’ first decade, up until 2014, this was not the case though.  GOOGL had actually outperformed DPZ for much of their lifespans as public companies.  From then up until early 2016, the two stocks alternated between being the leader, but in the last two years, Domino’s ran away with things.  Part of the reason for this is DPZ has fairly consistently paid a dividend since 2004 which is why returns for the stock have been considerably better over the long term.

https://www.bespokepremium.com/think-big-blog/

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