Market Insights

Rising Corporate Debt: Could CLOs Pose a Danger?

In the lead-up to 2008, securities known as collateralized debt obligations (CDOs) and collateralized mortgage obligations (CMOs) held large amounts of risky mortgages and were direct contributors to the credit crisis that ensued. While mortgage lending standards have improved considerably since...

Investors’ Focus on Downside Risk as Relevant as Ever

This blog below was originally posted in May of 2019; in fact, it was the second blog we ever published. However, with volatility returning to the markets as investors weigh the potential impact of the coronavirus (also known as the Wuhan coronavirus), we deemed the concepts discussed previously to...

Cash on the Sidelines Reaches Highest Levels Since 2008

Slowing global economic growth. Heightened valuations. The longest bull market in U.S. stock market history. A yield curve that spent part of 2019 inverted. Investors have had plenty of reasons to get defensive and raise cash, and many have done exactly that.

2019 was a bit of an anomaly in the way...

Benchmark Agnostic in an Era of Index Mania

It’s not that agnostics don’t care, they’re just indifferent. They neither place faith in nor disbelief with the subject at hand. That, in a nutshell, is our view of the makeup of the S&P 500, one of the benchmarks to which we compare the performance of our strategies. Specifically, it is the...

How M&A Can Impact Investors in Economic Slowdowns

Over ten years into the current bull market in equities, and likely closer to the end of the economic cycle than to the beginning, investors and corporate management teams are struggling to determine the best places to allocate capital. With concerns over slowing global economic growth, Brexit and...

Top 3 Blog Posts 2019

Happy New Year! 

We sincerely appreciate your continued interest and support of our market insights.  Below we recap our 3 most popular blog posts of 2019.  

As always, we welcome your comments or questions.

Thoughts on Risk Management and a Strong Sell Discipline

As portfolio managers, we are often asked how we think about risk management at both the portfolio level and the individual stock level. From a bottom-up stock analysis standpoint, we believe the way we view risk is quite different than most investors.

The Problem with High Dividend ETFs

Asset flows into exchange-traded funds (ETFs) over the past twenty years have been staggering, especially during the post-2008 period. In November of this year, U.S.-based exchange-traded funds surpassed a record $4 trillion in assets¹. The graph below illustrates the dramatic growth:

[MARKET UPDATE] Rising Premiums for Property-Casualty Insurers

The property-casualty industry is cyclical – a function of insurers being unable to know their cost of goods sold (i.e. claims) until well after the policies were incepted. One can see in the chart below where we are in the cycle¹.

The Repo Market: Why Investors Should be Concerned

Near the end of the third quarter, the overnight funding market (commonly referred to as the “repo market”) exhibited a level of instability not seen since the financial crisis. However, many individuals don’t fully understand the implications of this disruption, nor do they have a full grasp of...