Thoughts, ideas and insight from the top minds in the investment world
Over 3 million new accounts were opened at Robinhood in the first quarter of this year – a resurgence in individual stock picking in the heart of the COVID-19 shutdown few could have anticipated. The renewed interest in individual stocks is in opposition to a trend of just a year or so ago, where the rise of passive investing, robo advisors and the challenges of trying to beat the market put a damper on investors… Read More
Buying expensive stocks has historically been a terrible investing strategy. On average, expensive stocks significantly underperform the market as a whole over time. But despite the poor performance of the group, the absolute best performing individual stocks typically come from within this universe. The difficult part is trying to identify them in advance. In this episode, we look at a quantitative growth strategy developed by Partha Mohanram, a professor at the University of Toronto, and… Read More
By Jack Forehand (@PracticalQuant) Valuing companies can be a challenging process. While it is commonly accepted that the value of a company is the present value of its future cash flows, predicting those cash flows and judging their value relative to the current price is an inexact science at best. Value investors like to find companies with higher current earnings relative to their price, which requires less projection of future growth, while growth investors like… Read More
The London-based team at Goldman Sachs has been approaching U.S. investors about buying European stocks, according to a recent article in Barron’s. “The good news is, they’re not hanging up the phone,” the article states. “On the other hand, they’re still not buying either.” Goldman strategist Sharon Bell notes that the yield gap between equities and bonds “remains substantial and in our view should continue to encourage asset allocators to search for growth and value… Read More
Buffett’s best-ever trade may be his move into tech giant Apple, which earned Berkshire Hathaway $40 billion since the market bottomed in March. This according to a recent article in CNBC. “Berkshire Hathaway’s Apple stake—which has claimed 40% of its equity portfolio—is up a whopping $40 billion since the market bottom in March,” the article reports, adding, “The investment in the tech giant played a crucial role in helping the conglomerate weather the coronavirus crisis… Read More
In a recent episode of WealthTrack, host Consuelo Mack talked with Miller Value Partners’ founder and CIO Bill Miller about the state of the market today and his outlook going forward. Mack prefaced the interview by outlining what she called “pandemic pivots” —changes that have occurred since the Covid-19 crisis began: $3 trillion collapse in U.S. GDP $10 trillion fiscal and monetary response $740 billion (annualized) loss in wages and salaries $3 trillion in transfers… Read More
In a recent interview with CNBC, billionaire investor Bill Ackman said he’s bullish on the U.S. and markets over the long term but added “I’m cautious on markets over the next period of time,” adding, “We are bearish on highly levered companies.” According to Ackman, companies with heavy debt loads will “struggle because it will take time for the economy to reopen,” noting his belief that the Fed won’t bail out heavily leveraged businesses—that have… Read More
The S&P 500 is sending a positive signal, according to a recent article in Bloomberg. The so-called golden cross—when the S&P 500’s 50-day moving average breaks above its 200-day level—is seen by some technical analysts as a “positive omen as it frequently precedes sustained rallies.” Specifically, according to data from Sundial Capital Research, golden crosses for the S&P 500 have reportedly “corresponded with the end of every major bear market in the last 70 years.”… Read More
Veteran investor and former Pimco fund manager Bill Gross says the surge in growth stock performance is tied to interest rates and, if they rise, value will be poised to outpace growth once again. This according to an article in CityWire. Gross shared this insight in his first published investment outlook since retiring from fund management in March of 2019. He reportedly argues that “Treasury Inflation-Protected Securities (TIPS) yields are going higher, and that means… Read More
A recent Validea blog outlines the following eight lessons Warren Buffett has taught Berkshire Hathaway shareholders— that may have kept them loyal through recent years of lagging performance: Education: The consistent messaging in Buffett’s annual letters to shareholders that advocates for “long-term buying of good businesses at what are hopefully reasonable prices, controlling your temperament and believing in the U.S. stock market and corporate America over time.” Keeping Emotions at Bay: Buffett is steadfast in… Read More
Earlier this month, Bridgewater Senior Portfolio Strategist Jim Haskel discussed the current market environment with the firm’s Co-CIO Greg Jensen including the global outlook as the Covid-19 pandemic continues, the challenges faced by policy makers and the prospects for deflation, inflation or stagflation. Here are some highlights: Jensen emphasized how we are facing a “rare set of circumstances” because the current crisis is a result of an income shock—rather than a credit shock, which triggered… Read More
