Research

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During earnings season, about 1 in 13 Technology stocks trades down 15% or more on results.   Last quarter we saw the highest percentage of “blow-ups” in a decade.  With so much quantitative money entering the market after earnings, some of these blow-ups become good entry points (or good to immediately cover if an investor was

We remember in 1987, Australian Pat Cash beat Czech star Ivan Lendl in the Wimbledon Gentlemen’s final.  A fan in the crowd famously held up a sign that said “Cash is better than a Czech.” Many investors would agree that cash on the balance sheet is better than an “I.O.U.,” and many also focus on

If stagflation were a stock, it would be up off of lows. The consensus has rightfully assigned a very low probability of stagflation appearing over the past couple of years. Nominal GDP has been strong, and inflation has peaked and rolled over. But trends are slowly changing. While a slowing economy and stubborn inflation may

The stock market is having a bad month. The S&P500 is down 5% this month, owing primarily to changes in the perception of interest rates. As we show below, there is a strongly negative and statistically significant relationship between 24-month Fed Fund Futures (the perception about interest rates two years from now) and the price-to-forward

Given the huge run in NVDA and other AI-Semiconductor stocks, many investors have been asking about a potentially imminent rollover.  Even though NVDA’s May 22nd earnings announcement is more than a month away, diversifying exposure consistently comes up in our meetings.  We thought it was prudent to look for Technology stocks that trade with a relatively

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In last week’s Level Set Level Set – The Bull Case Narrative Revisited we offered three reasons why we are bullish on US equities: easy financial conditions, gross margin expansion, and earnings growth. Today, we address what might cause the market to rollover and some defensive ideas for those over-exposed to AI-semiconductors: Tightening financial conditions

We comprehensively analyzed gross margins for US corporations, and how they relate to valuation. Our conclusion is that… 202404_Why_Gross_Margins_and_Valuations_are_Higher-1Download

We have been arguing for several months and still believe that there are three primary reasons the market is likely to continue to rally. An Accommodative Fed Gross Margin Expansion Earnings Growth for Several Years The first reason we are maintaining our bullish stance is our expectation that the Fed will eventually be accommodative, and