Stocks Finish at Session Lows on Worries in the Financial Sector

BOTTOM LINE: The Portfolio finished lower today on losses in my Computer longs, Retail longs and Biotech longs. I added to my (EEM) short and added (IWM)/(QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, every sector fell and volume was above average. Measures of investor anxiety were elevated into the close. Today's overall market action was bearish. I speculated a couple of years ago that growth stocks were poised to embark on a period of multiyear outperformance over value stocks. I most recently made the case at the beginning of the month. Considering that the overwhelming majority of managers, especially hedge fund managers, are value investors, this could help explain some of the extreme pessimism towards U.S. stocks. Here is a look at how the two styles are performing over the last 12 months:

Style	12-Month Return
Russell 1000 Growth	+18.1%
Russell 1000 Value	+ 6.8%
Russell Midcap Growth	+ 19.0%
Russell Midcap Value	+ 6.5%
Russell 2000 Growth	+16.1%
Russell 2000 Value	-1.0%

As far as Barton Biggs being wrong about his year-end bull stampede call after just one day, let's not forget that he was one of the few that timed the bottom perfectly back on August 16 right when many others were calling for crashes, bear markets and depressions beginning. The S&P 500 is 110% higher since the October 2002 major bear market lows and is only 3.5% off a record high despite calls by many for a new bear market beginning all the way up every few months.