Just after Labor Day we made a post about value stocks warning of the market nearing a top. Today we’ve updated the chart that shows Berkshire Hathaway (BRKB) and the S&P 500 Index (SPX). As you can see, the rotation to value has continued over the past month. This is evident by the price of BRKB continuing up while SPX moves sideways. As we mentioned in the previous post, this is a sign that we’re closer to the top of a rally than a bottom. Money managers continue to move slowly but surely to safety. This in itself isn’t a near term problem because it takes managers with a lot of money time to make major adjustments to their portfolios. Big dollar sellers try to sell into strength so they don’t move the markets much as they change positions. This slow steady distribution and rotation is what creates tops that last several months before they are recognized. When we look at value stocks (using BRKB as a proxy) out performing
Market Risk Moderate
Long / Short Hedge Portfolio
Long / Cash Portfolio
