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]U.S. Government Just Gave Investors Part of their “Super Stock” for Free (Sort Of) [2] There is Never a Good Time For Active Management – But Now Might Be One [3] Gundlach’s Market Outlook [4] Global Growth Accelerating: Reasons and Risks ——- Photo: Copyright: arcady31 / 123RF Stock Photo  

Burton Malkiel on How to Invest in an Overpriced Market

In a recent article for The Wall Street Journal, Burton Malkiel, author of the celebrated market tome A Random Walk Down Wall Street, wrote that “Investors have reason to worry.” The chief investment officer of Wealthfront argues that all asset classes appear to be overpriced at the moment, and that an investor’s best defense in the effort to control risk should include both diversification and rebalancing. “Broad diversification,” writes Malkiel, “is rightly known as ‘the… Read More

Robert Shiller on the Pricey U.S. Market

Nobel Laureate and Yale professor Robert Shiller recently wrote for the Project Syndicate about the comparative levels of market valuation across countries and how, “right now, the United States is leading the world.” He adds, “What everyone wants to know is why—and whether its stock market’s current level is justified.” Shiller advocates using the cyclically adjusted price-earnings ratio (CAPE)– that he developed 30 years ago with Harvard professor John Campbell—and discusses the importance of evaluating… Read More

The “Near Perfect” Investing Environment May End Soon

For the past two decades, government bonds have moved in the opposite direction of equities in the short run but have produced similarly strong gains in the long run, representing a nearly “perfect” investment, according to a recent article in The Wall Street Journal. From the beginning of 2000 to the end of 2017, the article says, “holding the latest 10-year Treasury and reinvesting coupons returned 155%, the S&P 500 with dividends 158%, while a… Read More

There is Never a Good Time For Active Management – But Now Might Be One

By Jack Forehand (@practicalquant) —  When active managers are struggling relative to their benchmarks, you will often hear the same description of the problem. They will talk about how the current period has been a rough one for active management, but things are about to change and we are moving toward a “stock pickers market” where the criteria they use to select stocks will begin working again. They will argue that active management will rise again… Read More

Could the Housing Market Be Too Hot?

A recent Bloomberg article reports that homebuilder stocks outperformed all other groups last year, offering different points of view and metrics regarding whether the market might be reaching pre-bubble levels. On the one hand, it says, “there are plenty of reasons to be optimistic,” citing the housing needs of millennials and baby boomers as factors expected to fuel demand in the coming years “if employment remains strong.” There has also been an uptick in first-time… Read More

Ray Dalio Says Market Surge Ahead

 At the recent World Economic Forum in Davos, Switzerland, billionaire Ray Dalio told CNBC that the coming tax cut could lead to big gains for the U.S. stock market. “We are in a Goldilocks period right now,” said the Bridgewater CEO. “Inflation isn’t a problem. Growth is good,” he said, predicting a “market blow off” rally fueled by cash from banks, corporations and investors. “There is a lot of cash on the sidelines,” he added. “If… Read More

Soroban Capital is Among Funds Returning Client Money

Soroban Capital Partners is the latest in a “string of managers to return some client money as stock markets have rallied.” This according to a recent article in The Wall Street Journal. While the firm says it remains optimistic about the market environment, its plan to return some client money from its oldest fund will allow for the “continued flexibility to compound capital over the long run.” The article cites comments by Greg Dowling of Fund… Read More

Conventional Fund Manager Evaluation is Wrong

The conventional wisdom regarding evaluating the performance of an asset manager is wrong, according to a recent article in The Wall Street Journal. Typically, the article points out, investors focus on a manager’s one, three and five-year trailing returns, the underlying assumption being that the better managers should outperform during these windows. However, it argues, “a manager’s realized return can be thought of as containing two components: skill and luck,” adding that, over one-, three-… Read More

Global Growth Accelerating: Reasons and Risks

In a recent WealthTrack interview with Consuelo Mack, Evercore founder and top-ranked economist Ed Hyman and First Eagle’s Matthew McClennan share insights regarding the current level of global economic growth ten years into the post-financial crisis recovery. Hyman, U.S. small business optimism is surging, with Germany, Japan and China experiencing significant and accelerating growth. McClennan says, in large part, this is due to unusually stimulative monetary policy, noting that the ECB is not raising rates… Read More