Southern Europe Weathering Stormy Markets

As market volatility increases, one region that seems to be keeping a firm footing is Southern Europe, according to a recent article in The Wall Street Journal, that says, “If the events of 2018 haven’t dented the global growth outlook too much, then that could persist.” Italian, Portuguese and Greek stock markets are all in positive territory this year, the article reports, and Southern European government bonds are also performing well. “The mix of good bond-market… Read More

Signs that a Bear Market May Be Coming

A recent article in Barron’s reports that while a flattening yield curve is “no reason to bail out of stocks,” bond yields could provide investors with “a sell signal in the years ahead.” A flattening of the yield curve occurs when short-term bond yields rise faster than long-term yields, which can happen, the article explains, if investors “think the Fed is making a mistake” in hiking interest rates and may have to reverse its course.… Read More

A Different Definition of Risk

By Jack Forehand (@practicalquant) —  Investment professionals like to use a myriad of fancy terms to measure risk. The problem with almost all of them is that they are in no way understandable for the average investor. Words like standard deviation, max drawdown, tracking error and Sharpe ratio are often thrown around to judge how risky a portfolio is. Those concepts are not only very difficult for investors to understand, but they also aren’t all that… Read More

Ray Dalio on the Odds for Trade and Other Wars

A recent Bloomberg article recounted comments made my Bridgewater Associates founder Ray Dalio on LinkedIn. Here are a few: “Recent geopolitical developments have led me to raise my probabilities of trade and other types of wars, such as capital wars, cyber wars (and possibly even shooting wars).” Dalio described current trade talks with China as a “public game of chicken” since President Trump “raised the stakes by another $100 billion.” While he initially “thought trade… Read More

Mario Gabelli Isn’t Worried About the Passive Trend

During a recent interview with Institutional Investor, Gamco CEO Mario Gabelli shared insights about the current market environment. The article says that Gabelli “isn’t too worried about the trend toward passive investing that has robbed active-management firms like his of assets,” but believes a passive approach makes sense for long-term investors that “don’t have much knowledge.” Gabelli refers to himself as a “bottom-up stock picker,” the article says, and is currently interested in the “companion-pet”… Read More

Yale Says its Endowment “Crushes” Indexes

The 2017 Yale University annual report argues in favor of active management strategies used by the investment offices of the country’s ivy league schools, according to a recent article in Institutional Investor. In the report, Yale rebuts Warren Buffett’s suggestion–stated in his 2016 letter to Berkshire Hathaway shareholders, that endowments and other institutional investors would be better off investing in an index like the S&P 500—by claiming that the top ten U.S. university endowments “amaze,” and… Read More

Boring Stocks are Winning

For emerging-market and European equity investors, low-volatility stocks are “paying off by the most in two years,” according to a recent Bloomberg article. “Low volatility—sorting stocks based on the magnitude of price swings—tends to beat the market over time,” the article states. “The factor’s performance in the U.S. has lagged lately, but calm stocks elsewhere have picked up the slack.”

Most Read Posts on Validea’s Guru Investor

Below are links to our most popular posts for this week on Validea’s Guru Investor blog. [1] Want Consistent Market Outperformance? You May Want to Think Again [2] Jeremy Grantham’s Market Update [3] Are Stock Pickers Ready to Remove Facebook from “FANG”? [4] Artificial Intelligence is About to Hit Your Portfolio ——- Photo: Copyright: arcady31 / 123RF Stock Photo  

Hedge Fund Stars Losing Shine, But the Industry is Fine

Despite the fact that hedge funds have “fallen on hard times”, writes columnist Nir Kaissar in a recent Bloomberg article, “don’t shed a tear for the industry just yet.” The article reports that, although the industry hasn’t kept pace with the broader market in recent years (citing Alan Fournier’s Pennant Capital Management and David Einhorn’s Greenlight Capital as examples), on the whole it has performed better than some of the “star” managers–the HFRI Fund Weighted… Read More

Are Stock Pickers Ready to Remove Facebook from “FANG”?

Some investors are beginning to question their FANG stock holdings, according to a recent article in The Wall Street Journal. While the FANG stocks have “long risen in lockstep and helped power the long-running market rally,” the article reports that since Facebook’s recent disclosure that millions of users’ data was compromised, “stock-picking fund managers have soured on the social network’s shares, with some either partially or completely abandoning their investments.” Some managers, it adds, believes… Read More