Macro Analysis
We provide in-depth analysis of macro trends in the global economy, identifying key changes in financial markets to help investors swim with the tide, rather than against it, and enhance their returns.
The Patient Investor premium service offers weekly analysis of financial markets and secular trends to help investors identify investment opportunities in key sectors.
If you want to learn more, sign up for $1 for the first month. You can cancel at any time. This offer is for new subscribers only.
Stock selection, position sizing, and investment recommendations are only available to private clients. Contact PVT Capital to learn more.
Secular Trends
Secular trends are generational trends, spanning several decades, that significantly impact the global economy.
We identify key industries that stand to benefit from these trends and avoid those at a disadvantage.
To learn more, see Mega Trends.
Leading Indicators & Market Risk
We calculate leading indicators for the US and Australian financial markets, which provide a single objective measure of the market cycle.
We also combine several valuation metrics to objectively measure stock market drawdown risk for US markets and the ASX.
Subscribers to our free weekly newsletter receive updates on the stock market cycle and pricing risk. The examples below are from May 3, 2025.
USA
The gauge on the left indicates bull or bear market status, while 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.
Learn More
See Managing Risk, Bull-Bear Indicator, and Stock Pricing to learn more.