Research

Level Set: Sell Some Mag 7

The Case for Market-Weight the Mag 7 Over the last several years we have maintained the view, that it was prudent for long-only US equity managers to be at least market-weight the Mag 7. Today, our views have evolved to the point where we are changing our mind and believe lowering exposure is prudent. Our

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VIDEO – The Key Ingredients Of A Successful M&A Deal

The conventional wisdom is that 2025 will be a big year for Mergers & Acquisitions (M&A). Less regulation and pent-up demand have most of the lawyers and investment bankers we know quite busy these last few weeks. Hence, we looked at all M&A for the last 25 years for US companies, small-cap or larger, that

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Level Set: Were There Clues from Monday’s Blues?

Last Monday was a wake-up call for some portfolio managers. Whether explicitly through top-down work or ex-post through bottom-up security identification, many investors are overweight growth investment themes they believe can work for many years. Last year (see here) we identified six key long-term growth themes; AI Semiconductors, AI Software, Power / Utilities, Housing /

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VIDEO – What’s The Right Beta For Your Portfolio?

In December, we wrote a detailed note about beta (link), and how there is persistent alpha destruction associated with each incremental increase in portfolio beta. Investors tend to ignore beta when the market is performing well, like it did in 2023 and 2024. But the recent price action is likely a warning sign for CIOs,

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The Key Ingredients Of A Successful M&A Deal

The conventional wisdom is that 2025 will be a big year for Mergers & Acquisitions (M&A). Less regulation and pent-up demand have most of the lawyers and investment bankers we know quite busy these last few weeks. Hence, we looked at all M&A for the last 25 years for US companies, small-cap or larger, that

Read More »

What’s The Right Beta For Your Portfolio?

In December, we wrote a detailed note about beta (link), and how there is persistent alpha destruction associated with each incremental increase in portfolio beta. Investors tend to ignore beta when the market is performing well, like it did in 2023 and 2024. But the recent price action is likely a warning sign for CIOs,

Read More »

Level Set – The Compelling Case to Buy Industrials

As part of our year ahead outlook in early January, we upgraded the Industrials sector to overweight. So far this month, the sector has been the best performing in the S&P500, up 7.1%, vs the market at 3.3% (see below). GEV (up 28%), GE (up 18%), BLDR (up 17%), HWM (up 16%), and MMM (up

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VIDEO – Beneficiaries from The Biggest New Technology Themes

Late in 2024, research firm Gartner, Inc. came out with a report highlighting the ten Technology trends to watch for 2025. We searched the earnings call transcripts and websites of 383 public US Technology companies, and created baskets of stocks in these key areas to help us understand these Technology trends and identify stock ideas.

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Level Set – Where Is the Revenue Growth?

We wrote in our year-ahead outlook, that revenue acceleration would be an important variable for stock selection in 2025. After gross margin growth was its most effective for stock selection in 2024 in over 20 years, we now think revenue growth and acceleration will matter more for stock pickers in 2025. To be clear, at

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