Recently a friend sent me an email asking, “How far does the stock market have to fall until you would say it is in neutral territory – that is, neither overpriced nor underpriced?” The market is displaying wild day to day swings and is exhibiting classic emotional behavior. To attempt to get a handle on market […]
Summary Emerging markets (EM) small cap value is an attractive asset class for long-term, value-oriented macro investors. EM equities and particularly EM small cap value, have lagged for the past ten years and are poised for a return to their longer-term strong performance.Investors need to carefully weigh coronavirus, ESG, financial reporting, currency, political and trade […]
My last article, “Mean Reversion + Valuation = Opportunity” cited eleven asset classes that have opportunity for outperformance in the coming decade. That led me to ask: Can portfolios constructed with these out of favor assets provide superior returns? Specifically, I wanted to know: How have Contrarian Portfolios performed over long periods when no mean […]
U.S. equities are near their highest levels in history, based on valuation metrics. This suggests meager returns of 4-5% per year over the next decade.However, based on reversion to the mean and attractive valuations, there are several attractive asset classes.U.S. value, international, emerging markets, natural resources, MLPs and gold present opportunities.These assets have the potential […]
Identifying the source of “negative alpha” in your investing is just as important as crafting a sound investment strategy and approach. My story of ill-advised market timing illustrates an example of generating negative alpha. It can be difficult to break bad investing habits, even if you have advanced investing knowledge and skill. I recommend performing […]
The saying “history never repeats itself, but it rhymes,” is often attributed to Mark Twain. I recently saw a blog post from the knowledgeable and interesting financial blogger, Doug Short. In his “Market Valuation, Inflation and Treasury Yields: Clues from the Past,” he offers some interesting charts and data. The P/E 10 ratio, which shows […]
With the roller coaster ride we’ve had so far this year, I decided to weigh in on what I see happening, with a look at the longer term. The S&P 500 stock index dropped 10.5% from January 1st to 1829, the low for the year, followed by the recovery to 2022 as of March 11th […]