Using Martin Zweig's Model in the Modern Era
Bill Ziemba and I co-wrote the paper at the following link on using Martin Zweig's Monetary and Momentum Models in the modern era: https://www.tandfonline.com/doi/full/10.1080/21649502.2015.1165917 The model is from Zweig's book, "Winning on Wall Street" published in 1986. So far, it has served me well. I am certain there are many other, far better, models, but this one is easy to use and doesn't take much time to maintain. The key point about Zweig's model is that it keeps you in touch with the market trends. Here is a quote from our paper which I have edited slightly so that it is updated with numbers from August 5, 2019 -- a selloff day: "Zweig suggests three crucial conditions for a bear market: 1. Extreme deflation. This is not present in 2019, but the fed just cut rates. Perhaps they fear deflation because deflation is what happened during the great depression? 2. PE ratios of 18 or above. The current PE of the S&P is around 21