don coxe asks when did we ever see commodity-based stocks outperform everything else as the economy headed into a deep recession? the answer is the stagflation of the 1970's. he notes that even base metals and agriculture have outperformed the broad market since november.

he used to say we need the banking index (bkx) to lead the way before the market can rally, but now he uses the regional banks as a proxy for the banking sector because the money center banks have become investment banks, and have made themselves irrelevant. he describes their valuations as ceo-pe, as they can now be valued by dividing the market cap by the amount being paid to the ceo.

the major difference between now and the 1970's is the falling real estate market, but he doesn't see a 1930's deflationary deflation because of the enormous liquidity being pumped into the financial system.

http://events.startcast.com/events6/...