Page Two

Decades ago I used to listen to Paul Harvey. At the time he was this country’s most famous talk radio personality. According to Wikipedia:

“Paul Harvey Aurandt, better known as Paul Harvey, was an American radio broadcaster for the ABC Radio Networks. He broadcast News and Comment on weekday mornings and mid-days and at noon on Saturdays, as well as his famous The Rest of the Story segments. From 1952 through 2008, his programs reached as many as 24 million people a week. Paul Harvey News was carried on 1,200 radio stations, 400 American Forces Network stations, and 300 newspapers. At the end of the first segment of his broadcasts, Paul would say ‘Page Two’ and at the end of his show, would say: ‘This is Paul Harvey . . . Good Day’.”

And, that is what I am saying this morning as I turn to “Page Two” of my career after a wonderful experience at the venerable firm of Raymond James. I hope I have left Raymond James on the high road because I cannot tell you how much I appreciate the opportunities Tom James, and the firm, have afforded me over the last 20+ years, but it was time to move on. I will be writing an investment letter on Monday’s, my semi-retired ex-Raymond James colleague Andrew Adams is going to bring back his much in demand “Charts of the Week” report on Wednesdays, and another ex-colleague, Harry Katica, will be writing about sectors and individual stock ideas on Friday. Of course, I also will be writing about stocks, and mutual fund ideas, like Amy Zhang’s Alger Small Cap Focus Fund (AOFAX/$20.44). I like the much-maligned small cap stocks and think the criticism of them has reached excessive levels. As market guru John Murphy writes:

“APRIL REBOUND IN FINANCIALS IS GIVING A BIG BOOST TO SMALL CAPS. I've been writing about the recent upturn in financial stocks and, to a lesser extent, small cap stocks. I also suggested that a stronger dollar might be helping smaller stocks. That's because a rising dollar usually favors domestic-oriented smaller stocks more than large multinationals whose exports become more expensive to foreign buyers. Another boost to smaller stocks may be coming from a recent resurgence in financial stocks. That's because financials are the biggest sector in the Russell 2000. Chart 1 shows the Financial Sector SPDR (XLF/$27.70) clearing its 200-day average earlier this month before rising to the highest level in nearly seven months. Its relative strength ratio (solid line) started rebounding this month after underperforming for most of the past year. Chart 2 shows Russell 2000 Small Cap Index ($RUT/1591.82) moving above its 200-day line this month by a much smaller margin. But April has seen stronger performance. Its relative strength ratio (solid line) is also starting to recover (but by a smaller amount) from potential support near its December low. The fact that both groups have started to do better (both on an absolute and relative basis) during April may not be a coincidence.”