On Friday, September 30th, we held our Q4 Outlook call for clients.  This is the third quarter in a row we’ve held an outlook call, which has proven to be a very popular feature among Bespoke clients.  The quarterly outlooks are an outgrowth of Bespoke’s widely read and quoted annual outlook piece, The Bespoke Report, which is released at the end of December each year.  A recording of Friday’s call and the 26-page presentation are available with any paid membership to Bespoke.  Review our subscription options and choose any plan to listen to the call and view the presentation.  In the call, we discussed:

  • Why we think valuations are excessive but are not likely to be the spark for a sell-off.
  • Why from a seasonality perspective, we were not surprised at all by the uptick in volatility in September.
  • Why weak sentiment among individual investors and the analyst community are key contrarian support indicators heading into Q4.
  • Why technicals, seasonality and history support a positive outlook for stocks in Q4.
  • Why elections matter for Q4 performance.

In addition to looking forward to Q4, we also looked back to see what worked in Q3.  As you can see in the preview below of one page from the presentation, Q3 was all about “rotation.”  The biggest winners from the first half of 2016 were the big losers in Q3, while the weakest stocks in the first half out-performed dramatically in Q3.  That probably doesn’t bode well for active managers like hedge funds, unless they managed to rotate their books appropriately!

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