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CYCLICAL TRADE MIGHT BE OVERDONE

12 June 2009 by Cullen Roche 2 Comments

As the global economy begins to reflate and show tepid signs of recovery investors have all piled onto the same side of the boat into the cyclical industries.  In more evidence that everyone is in the same trades comes this excellent graphic out of Axa Investment.  Cyclicals in Europe are more expensive than they’ve ever been:

cyc

Cullen Roche

Cullen Roche

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Comments
  • joe

    I moved against cyclicals. I took a hedge position in a couple asset classes long stocks tied to product cycles and short cyclicals, in addition to being long quality and short junk. I’ve moved to a bit net long.

    06/13/2009 at 10:26 AM
  • Cullen Roche TPC

    Yield names look really attractive to me right now. XLU with a 4.66% yield sure beats the heck out of tech names at a PE of 20 or bonds at a yield of 4%. I think you’re smart to trade into quality at this point in the rally….

    06/13/2009 at 10:46 AM