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...
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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.
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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.
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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:
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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.
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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...
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“After a ten-year post-financial crisis period of consistent underlying conditions for equity investing, fundamentals are shifting.”
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“The national debt is akin to student loans – while not an immediate concern, it could become a major problem.”
Consumer Debt
Last week, we discussed the state of the corporate leverage. Consumer debt is also an area of concern, but to a lesser extent than corporate debt. Domestic consumer debt is...
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“Debt, we've learned, is the match that lights the fire of every crisis. Every crisis has its own set of villains - pick your favorite: bankers, regulators, central bankers, politicians, overzealous consumers, credit rating agencies - but all require one similar ingredient to create a true crisis:...
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“First-level thinkers look for simple formulas and easy answers. Second-level thinkers know that success in investing is the antithesis of simple…Your thinking has to be better than that of others…you must find an edge they don’t have. You must think of something they haven’t thought of, see things...
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