Mega Trends
The Patient Investor provides in-depth analysis of mega trends in the global economy and identifies key changes in financial markets. We help investors to enhance their returns by swimming with the tide rather than against it.
Mega trends are secular or generational trends spanning several decades that significantly impact the global economy. We identify key industries that stand to benefit from these trends and those likely to be disadvantaged.
Free Weekly Updates
Take advantage of our free weekly updates covering:
- Leading market indicators for US and Australian financial markets, which provide an objective measure of position in bull/bear markets;
- Composite valuation indicators that measure stock market drawdown risk; and
- Occasional bonus updates on mega trends.
Premium Updates (Market Analysis)
Upgrade to the Patient Investor premium service for full coverage of mega trends, key sectors, inflation, interest rates, commodities, energy, and precious metals—to help identify investment opportunities.
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PVT Capital
PVT Capital, an associate company, offers stock selection, position sizing, and investment recommendations for wholesale clients. If you qualify as a wholesale client, kindly contact PVT Capital to learn more.
Wholesale Clients
A certificate from a qualified accountant is required to confirm that you qualify as a wholesale client under Section 761G of the Corporations Act 2001. Please consult your accountant if unsure as to whether you qualify.
Leading Indicators & Market Risk
We offer objective measures for position in the bull/bear market cycle and stock market drawdown risk.
Examples below are from May 3, 2025.
USA
The gauge on the left indicates bull or bear market status, while the one on the right reflects stock market drawdown risk.
Bull/Bear Market
The Bull/Bear Market indicator is a composite of five separate measures below, with two of the five leading indicators now signaling risk-off:
Stock Pricing
The US stock pricing indicator reflects the average z-score of five key valuation metrics. First is Warren Buffett’s favorite, the ratio of total stock market capitalization to GDP, while the remaining four all relate to the S&P 500 large-cap index. The Price-to-Sales ratio compares the index to the most recent four quarters of earnings. Robert Shiller’s CAPE compares to a ten-year average of inflation-adjusted earnings. The PE of highest trailing earnings compares the index to the highest four consecutive quarters of trailing earnings, removing the distortion from sharp earnings declines during a recession. Last, Forward PE compares the index to projected earnings for the next four quarters.
We use z-scores to measure each indicator’s current position relative to its history, with the result expressed in standard deviations from the mean. We then calculate an average for the five readings and convert that to a percentile. The higher that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.
Australia
Bull/Bear Market
The ASX Bull-Bear Market indicator comprises four leading indicators for Australia, two for China (our largest trading partner), plus a 40% weighting of the Bull-Bear signal for US markets.
Stock Pricing
The ASX stock pricing indicator reflects the average z-score of six key valuation metrics. First, Warren Buffett’s favorite valuation indicator compares ASX stock market capitalization to GDP. The next two calculate the Forward PE and Price-to-Sales ratio using a 20% trimmed mean of ASX 20 stocks. The last three use the All Ordinaries index, reflecting roughly the top 500 stocks. The PE of trailing and highest trailing earnings will sometimes be equal, but the highest trailing earnings removes the distortion from sharp earnings falls during recessions. Z-score for the All Ordinaries Dividend Yield is inverted because higher yields indicate lower valuations.
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Learn More
See Managing Risk, Bull-Bear Indicator, and Stock Pricing to learn more.