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Bellwethers, by Victor Niederhoffer
It is fascinating to look at bellwethers. In the 1870s, the time of of WilliamWorthington Fowler, they were Fort Wayne and Erie and Chicago Northwestern (before it went banko and Ben Heineman made his fortune from buying it) and Harlem (Morse was there). Then came Pittsburg (they changed to steel in the 1890s) and GM (mid-century) and IBM in the second half.
Is there any truth to the notion of bellwether? Are there stocks that lead the market or predict something above and beyond co-movement? It seems nowadays that IBM has regained its bellwethership, but it must be tested, and changing cycles must be considered.
The influence of the yen on the aforementioned must not be forgotten, as it and the cuttlefish work their deception in an afternoon.