Market Insights

You Can’t Talk About Risk Without This

Risk is a hot potato. (In more ways than one.) We can’t talk about risk until we define it and give it context.

YODA from Star Wars said, “Named must your fear be before banish it you can.”

We’re Not Afraid of the Tough Questions

Some portfolio managers shy away from the difficult questions. Not the team at Prospector Partners:

• How much money do you have invested in your portfolios?
• When will your strategy typically do well? When will it underperform?
• What was one of your bigger mistakes in the portfolio?

Markets within Markets: Three Charts that Put Stock Divergences in Perspective

Rarely can entire markets be characterized by a broad, sweeping statement. Instead, we often find there are “markets within markets” – pockets of the stock universe that are behaving quite differently than the broader group. Often, these pockets are the areas that offer the most opportunity for...

Defining Defensive: Low Beta, or Counter-Cyclical?

With U.S. equities closing in on records again, and with stocks in bull market territory for the better part of the last 13 years, many investors may wonder how “defensive” their equity portfolio is. It’s not an easy question, as there is more than one way to define it.

Our own definition of...

Behind the Trade: From Idea Generation to Stock Sale at Prospector

It’s not easy for a stock to make it into a Prospector portfolio. In short, making it into a Prospector portfolio is a long, rigorous process … as it should be for any active manager. While no stock arrives at this destination through the exact same course, we strove to give interested prospects...

Perspective on Stagflation Potential

Cases of whiplash must have spiked lately. In a few short months, market commentators have abruptly transitioned from: “inflation is transitory” to “inflation might be more persistent” and now “prepare for stagflation!”

So what’s behind the change in sentiment?

Charts of the Month: Perspective on the Large Cap Rotation

Small cap stocks enjoyed a brief leadership position over large caps as the U.S. emerged from the recession, but the rotation has been short lived. Large caps have come into favor again, resuming a run of dominance that was in place before the pandemic.

A couple of charts below show how unusual the...

Does the Bank M&A Wave Still Have Legs?

Banks are on pace for their biggest year of M&A activity, in terms of dollar volume since the financial crisis, confirming one of our investment theses for the industry. And we expect the spate of deals to continue, as several factors drive consolidation among small- and mid-sized banks.

As the...

Investment Lessons from China Evergrande’s Troubles

Real estate developer China Evergrande has been a source of volatility in recent weeks, as the market gauges the economic fallout if the company defaults on its debt and the government doesn’t step in to help the struggling firm.

Like any investor, we hope the company’s problems are not a source of...

Last Week’s Volatility Raises Questions About Downside Capture

Stocks recovered quickly from initial fears about COVD-19 and have continued to climb higher for the better part of the last year and a half. But volatile moments such as last week, when the S&P 500 registered its largest intra-day decline since January, serve as a reminder that a strategy’s...