Morningstar: Value Investors Facing a “Great Opportunity”

Dan Kemp, the CIO of Morningstar’s EMEA division, sees opportunity for value investors and disagrees with the consensus that the coronavirus crisis favors growth strategies, according to a recent article in FTAdviser. “When you look at the UK market,” Kemp said, “It is priced very attractively compared to other equity markets.” He added that while it is difficult to predict what will happen regarding the political climate or central bank actions, history proves that share… Read More

Only Sell Your Stocks in These Cases

A recent Fortune article by Ben Carlson of Ritholtz Wealth Management offers investors valuable insights regarding how and when it might be appropriate to sell. “Those who actually sold a few months ago near the bottom of the bear market are in a much tougher position than those who are considering selling out now,” he wrote, adding, “but anytime you make a wholesale shift in your asset allocation it’s a challenging decision.” Carlson offers the… Read More

Is the “Smart Money” Worth Following?

Even though options trading may be a strong predictor of stock returns, researchers warn investors to be wary of “trying to profit from the unusual options activity regularly covered by CNBC’s ‘Fast Money.’” This according to a recent article in Institutional Investor. In a June paper, co-authors George Jiang of Washington State University and Cuyler Strong of the SEC wrote, “Our findings suggest that the CNBC coverage of unusual option activity has a destabilizing effect … Read More

Buffett’s Disappearing Alpha – Why It Doesn’t Really Matter

Warren Buffett has one of the greatest long-term investing track records of all time. The chart below shows the excess return (y-axis) over the market of some of history’s best performing investors and the number of years (x-axis) behind each track record – Buffett is way over to the right highlighted in yellow. Buffett’s total excess return over the market, a result of compounding 55+ years of market beating returns, may never be matched by… Read More

Hedge Fund Manager John Paulson Steps Down

John Paulson, who made billions anticipating the 2008 financial crisis, has decided to “hand his investors’ their cash back and turn his firm into a family office.” This according to a recent article in The Wall Street Journal. The decision has reportedly “been long telegraphed as assets at his firm have fallen and returns declined,” with the fund down over 10% year-to-date. The article notes that investors have been exiting Paulson’s funds for nearly a… Read More

Eddie Brown’s Fund Outperforms Peers by Picking Great Stocks and Employees

In a recent interview with Barron’s, Brown Capital Management founder Eddie Brown discusses his unconventional career path as well as his firm’s investment philosophy and opinions on women and minorities in the industry. Here are some highlights from Brown’s comments: “It’s really strange to me that, with our investment philosophy and our performance track record, while competing with the best and the brightest, we’re only at $14 billion [AUM]. Why we don’t manage $50 billion… Read More

Excess Returns, Ep. 32: Is the Price/Book Ratio Dead?

The Price/Book ratio has probably been the most important valuation ratio of the past century. If you look at the academic research that supports value investing, you won’t find any other ratio that is referenced more often. There is also no ratio that is used more by systematic value funds. But the rise on intangible assets and other factors have led many to question whether the ratio has value any more. , we look at… Read More

How to Navigate a Stormy Stock Market in 5 Steps

A recent article by New York Times columnist Carl Richards offers investors a road map for riding out today’s market volatility: Give yourself a break: It’s okay to feel “scared and unsure what to do next,” Richards writes, advising investors to accept the feelings as part of their humanness and to resist feeling guilty or “dumb” about it. Remember why you invested in the first place: Richards advises investors to circle back to their original,… Read More

For Alpha, ESG Isn’t Enough

A new study shows that combining ESG factors with high employee satisfaction leads to outperformance, according to a recent article in Institutional Investor. The study used data from employee-rating site Glassdoor and MSCI’s ESG ratings to build portfolios using both scores. The report—published last month by Kyle Welch of George Washington University and Aaron Yoon of Northwestern University—shows that portfolios with high ESG ratings and high employee satisfaction outperform those with low ratings by nearly… Read More

Jeffrey Gundlach on Covid and Market Risks

In a recent interview with Yahoo Finance, DoubleLine Capital CEO Jeffrey Gundlach shared a host of insights on market movements, the coronavirus pandemic impact and the outlook for the U.S. economy. Here are highlights from Gundlach’s comments: The Fed has “pulled out all the stops” in its efforts to thwart the economic volatility resulting from the coronavirus pandemic. Quantitative easing, he said, has been “more in 3 or 4 weeks of the pandemic than it… Read More