We have a meeting every day where we are asked about small cap stocks. We have recently written about mega / large cap value (LCV) investing and compared large-to-small cap. value (SCV) investing for asset allocators. SCV stocks have cumulatively performed in line with (LCV) stocks since the Financial Crisis but have lagged the S&P500 materially since 2019. SCV
It Used to Be Easier for Value Investors For many years, value investors would buy dips in stock prices, believing in investment cycles, which translated to predictable mean-reverting profit margins and valuations for many value stocks. If a stock was in an industry where demand and supply are cyclical, investors could gauge changes in demand
29 Days to Go One of the most challenging subjects to write about for people who analyze US equities is politics. However, following the Vice-Presidential candidates’ debate this week, and our 45-minute Zoom conversation last Wednesday, October 1st with former five-term Congressman the Honorable Harold Ford Jr. (CLICK HERE, Passcode: I6ZvuMP%) we have received several
Many cross-asset investors have been arguing they like small cap stocks over large cap stocks, citing extreme valuation and the Fed cycle as catalysts. Last week, we focused on large cap value stocks, arguing that they may have less upside given their lower beta, lack of Financials in the universe (if investors think rates will help),
This Week Is Better than Last Week When the China stimulus was announced this week, our initial reaction was that this is a new and incremental positive. Some investors have been waiting for a stimulus announcement for several quarters, so the timing this past week was surprising, and we have concluded the intervention is incrementally
With recent interest rate cuts, many investors are seeking insights on Mega/Large Cap Value (LCV) stocks. Our analysis dives into the current state of this sector, characterized by a number of viable investment options and significant changes in market dynamics. Changing LCV universe: The number of LCV stocks has dwindled to just 65, as the Financials
There’s Nothing Worse than a Wrong Consensus Bear Nothing is worse than being a consensus bear when the market keeps rallying. Most people know that September is typically a volatile month, and the average September returns are the worst of any month of the year. We flagged it, and so did everyone else. With it
We analyzed each follow-on offering over the last 25 years following the offer date. We discovered several attributes that are investable including…
NVDA history lesson: NVDA was $14.27 on January 5th of 2023, and subsequently rose to $135.58 on June 18th of 2024, a 9.5x appreciation. NVDA bottomed at $98.91 on August 7th, a 27% decline from its high. NVDA went from $3.20 early in 2019 to $30.95 late in 2021, for a 9.7x appreciation. But the stock then fell
We have long argued that it is challenging to make one-month market calls. Most of the signals that investors use are volatility gauges, and hence, a systematic approach to a one-month market call is a waste of time and money. However, many investors make shorter-term sector calls, and we focus on this challenge – one-month
