Major U.S. market averages hit record highs this past week.

The S&P 500 closed the week 0.15% higher, while the Dow Jones jumped 0.80%. The Dow has been a notable outperformer in recent weeks, and is trading higher than both the S&P 500 and the Nasdaq in 2017.

Tech stocks recovered, with the Nasdaq rising 1.29%. The MSCI Emerging Markets Index fell another 0.24%, as expectations of a Q4 rally in emerging markets were dashed.

Most gains in your Smart Money Masters portfolio this past week were moderate, with no single stock breaking out to the upside. Chase Coleman’s Priceline Holdings (PCLN) rose 3.30%. Mohnish Pabrai’s Fiat Chrysler Automobiles N.V. (FCAU) recovered 2.42%. Murray Stahl’s Texas Pacific Land (TPL), your latest recommendation, gained 2.37%.

Seven of your positions are trading below their 50-day moving averages this past week and currently are HOLDs.

Portfolio Update

For the S&P 500, it seems times couldn’t get much better.

Telecom and energy stocks have rallied to push above their 200-day averages. Every major sector is in a bull market, with the S&P 500 itself hitting a new all-time high on Monday.

Surprisingly, historical data going back to 1928 shows that such behavior is not bullish for the market in the coming months. Over the next month, there was more of a downside than upside skew to the returns historically. This negative effect lasted up to the next three months.

Since 1990, the returns have been significantly better. We also are in the midst of strong seasonality. I expect the market to continue its uptrend into the spring.

This is the final weekly update for Smart Money Masters for 2017, since I will be taking a holiday break next week.


Nicholas Vardy

Nicholas A. Vardy