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« The Three Amigos -- A True Story | Main | Avoiding Confirmation Bias »

September 13, 2007



I wish there were more details on how the sectors are evaluated (what is behind (Trend, Cycle, Anticipation)?). I understand it may be proprietory, but some insight that does not reveal an exact mechanics could be useful. Thanks.


Thanks to all for the comments on this new theme.

David astutely points out that time frames differ in sector rotation. We are talking about actively managed accounts and trying to find a sweet spot for rotation. I need to write more about this.

Bill sent along a nice paper, and I am still trying to get some comments from Vince, who has been off in some "seclusion" for something. He could tell me about it, but then it would be the end of the blog!

Tim has his finger on how we do the rotation, and we are considering adding some numeric ratings.

Thanks to everyone!



Jeff, if I read you correctly, you have a universe of sectors and you invest in the 8 highest rated? A new top 8 would replace the lowest current rated sector?

Are you investing funds based 100% on what your model is forecasting, staying 100% invested in the aligned ETFs?

Curious mind(s) want to know. Thanks.

Bill aka NO DooDahs!

I hope Vince enjoyed the paper I passed along. Hmm, FXI, IEZ, INP, EWH ... some of the things we're looking at are commonalities.

David Merkel

Jeff, you know I rotate sectors as well. I blend it with a value discipline. The two are a tough balance, but when in doubt I have let value dominate.

Your methods are interesting. I would assume you have more momentum in your models, because you seem to have a shorter holding period than I do. My sector rotation tends to be more fundamental, driven off of pricing power, and more anti-momentum in nature.

Anyway, nice article. Thanks for sharing it with us.

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