Introduction . What makes a great job? Many people will answer that what you do (the position) is most important. It very well may be, but it may not be all that makes you happy. The key to happiness in a job may be more complex than you expect. You… Continue reading
This gallery contains 44 photos.
Introduction . Worries are mounting, but the market keeps rising and it is not just stocks, as other asset classes have charged ahead as well. We are entering the later stages of a cycle when risk rises; however, if earnings growth remains robust, the market normally ignores red flags and… Continue reading
This gallery contains 22 photos.
Introduction . The uproar in the US and around the world associated with President Trump pulling out of the Paris Agreement will be felt for some time. The decision may not be entirely rational, so it gives us an opportunity to discuss some of his perhaps – “perhaps” to be… Continue reading
This gallery contains 33 photos.
Introduction . The median P/E (excluding negative earnings companies) of the top 20% of US stocks greater than or equal to $200 million market cap is 69 compared with the bottom 20% which is at 12. This 58 P/E point spread is higher than the historic average of 50 since… Continue reading
This gallery contains 39 photos.
Introduction . Over the past 30 years, numerous investing “anomalies” have been identified that cannot be explained if the markets are efficient. These factors, which provide the basis of value and growth investing, range from price multiples to momentum to financial variables that measure corporate performance. As passive investing and… Continue reading
This gallery contains 47 photos.
The Expectations Clock provides a framework for modeling performance, expectations of future performance, and human behaviors during phases of the performance cycle. It is a model of human over- and under-reactions to the environment. Success in investments (and business in general) is highly dependent on effectively forecasting future fundamentals… Continue reading
This gallery contains 20 photos.
Sentiment has risen strongly over the last six months to a high level while earnings growth has accelerated, a perfect environment for the stock market which posted strong gains (up 8.9% over the last six months). Consensus estimates call for earnings growth to continue to accelerate, but sentiment already implies… Continue reading
This gallery contains 24 photos.
A diversified portfolio of reasonably price quality growth stocks outperforms over time. Specifically, a portfolio that avoids high debt and high P/E stocks and focuses on high ROE companies earns above average returns with below average risk. . Figure 1 shows that annual variation in returns of the S&P 500… Continue reading
This gallery contains 17 photos.
Over the last six months, the S&P 500 Financials sector has rallied 24.2% (banks are up 34.3%) versus 8.3% for the S&P 500. This return has outpaced every other sector, and financials have also had the best return for the last 52 weeks and one month. Most of the drivers… Continue reading
This gallery contains 21 photos.
The implied long-term earnings growth of the S&P 500 is 5.74%. The return of the market is a function of dividends, earnings, and expectations (quantified by the P/E multiple). The P/E ratio looks extended and is a concern, and while cyclically adjusted market implied growth rate (CAIGR) is low versus… Continue reading
