The Market Note
Every Monday. Free, always.
What our model is seeing across roughly 3,600 US-listed stocks, which sectors are scoring, and how we read the current cycle. Market commentary — the picks stay behind the membership.
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The Market Note
One short read, every Monday. Free.
What the model is seeing across ~3,600 US-listed stocks, which sectors are scoring, and what we make of it. Market commentary — the picks stay behind the membership.
What the model is scoring
Which sectors are clearing the bar this week across roughly 3,600 US-listed companies, and whether that is businesses improving or prices falling.
How we're reading it
The cycle context behind the numbers, written the same way we write research: plainly, with the reasoning attached.
One idea worth sitting with
A single argument or distinction worth carrying into your own investing, whether or not you ever become a member.
Sample issue
A representative issue, written to show the format. The figures and sectors in it are illustrative — it is not a live market call.
Quality is getting cheaper, and nobody is enjoying it
4 min read
The screen threw up more names this week than it has in two months, and almost all of them came from the same two sectors. That is usually worth a sentence of explanation rather than a celebration.
What the model is seeing
We rescore roughly 3,600 US-listed companies on five factors — valuation, growth, profitability, momentum and estimate revisions — each measured against the company's own sector rather than the market as a whole. This week the number of names clearing our composite threshold rose meaningfully, which happens for one of two reasons: the businesses got better, or the prices got worse.
It was the prices. Revisions were roughly flat and profitability grades barely moved, while valuation grades improved across the board. That is a de-rating, not an improvement, and it is a much more interesting setup for a buyer than the reverse.
Where the scoring concentrated
- Industrials. The largest cluster of newly qualifying names. Margins have held up better than the multiple contraction implies, which is the specific gap we look for.
- Healthcare equipment. Second largest. Estimate revisions here are the thing to watch — a cheap name with falling estimates is not cheap, it is early.
- Software. Still scoring poorly on valuation despite a rough quarter. Cheaper is not the same as cheap.
How we're reading it
A broad de-rating in businesses whose fundamentals have not deteriorated is the environment a value framework is built for, and also the environment in which it feels worst to deploy. Nothing in the process changes: the universe gets rescored on the same cadence, one name clears the bar, and it gets the same written thesis it would have got in a cheerful month.
The thing we are watching rather than acting on is the revisions picture. Valuation improving while revisions hold is a buying setup. Valuation improving because revisions are rolling over is a value trap, and the two look identical for about a quarter.
One idea worth sitting with
A screen getting more crowded is not a signal to buy more. It is a signal that the market has changed its mind about a group of businesses, and the useful question is whether it changed its mind for a reason. We answer that one name at a time, in writing, and members see the answer.
The Market Note
One short read, every Monday. Free.
What the model is seeing across ~3,600 US-listed stocks, which sectors are scoring, and what we make of it. Market commentary — the picks stay behind the membership.
Want the picks themselves? See what membership includes, or read a full research note first.