Stockmarkets: Where the herd is heading now

Everyone knows that the key to successful investing involves going against the herd. But finding overlooked opportunities can be difficult. Enter Dylan Grice of Socit Gnrale. He has examined herding among analysts by gauging levels of research coverage relative to a stock's value. Using global data going back to 1987, it's clear that "the sectors most loved by them underperform those which are most neglected by them".

Grice found herding is most pronounced in the construction and clothing sectors. Analysts' least-loved sectors are the defensive ones MoneyWeek has been recommending for some time, including tobacco, energy, drinks and drugs.

Japan is another unloved area worth a look, says Tom Stevenson of Fidelity International in The Sunday Telegraph. In September, according to the Investment Management Association, the biggest net outflows were "once again" from funds invested in Japan. Yet the new government has fuelled hopes of structural reform, while Japan has a "unique position as a back-yard exporter to the world's fastest-growing region". It's also the cheapest big market in terms of book value.

The big picture: the mother of jobless recoveries

A sustainable recovery requires an improving labour market. Yet there's no sign of that. The unemployment rate has jumped to a 26-year high of 10.2%; the post-1945 record is 10.8%.

Add part-time workers who would rather work full-time, and those who've given up looking for a job, and the broadest measure of unemployment ('U6') stands at a record 17.5%.

The average working week is at a record low of 33 hours. This suggests employment won't recover fast, as firms will increase workers' hours before hiring new staff when things improve. Expect "the mother of jobless recoveries", says David Rosenberg of Gluskin Sheff.