Research

Level Set – What “BID” AI Means for Valuation, and Taking Risk

We continue to contemplate the possibility that all US equities might end up in one of three buckets based on the potential impact of AI – Beneficiaries, those that are Impregnable to AI, those that get Destroyed. We are using the acronym “BID” to reference these three buckets. Our suspicion is that companies that are

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Where Should A CIO Hunt For Alpha?

The world is clearly changing – with artificial intelligence, language processing, data ingestion and management, among other trends – rendering certain investment processes mute.  The traditional business models of the optimal ways to do “bottom-up” fundamental stock picking are evolving rapidly.  In today’s note, we put forth some frameworks to help CIOs identify fertile areas

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Level Set – The Pause Playbook

Given that a Fed pause is now seemingly the consensus view, we thought it would be appropriate to look back in time at previous Fed pauses and evaluate the performance of major asset classes and US equity sectors to look for patterns of behavior and create a Pause Playbook. To be clear, we aren’t certain

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Calling 17 of The Last Zero Market Pullbacks?

Over the last 35 years, the S&P500 was down 2.5% or more in a month in 17% of the months, or roughly 2x per year.  Recently, however, the pace has been higher, with 2022 having seven such months – the most over this period.  Every day, Wall Street “experts” reference or posit different signals to

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Industrials: The Case For Caution

The GICS classification shows that the industrials sector has the greatest number of sub-industries (13) with more than 15 stocks in each, more than any other sector in the market. The stock returns of the biggest 20 companies in the industrials sector have been more disperse as of late than at any time in the

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Level Set – Dispersion, Transports, Tech, Creep, and Recent Research

As earnings season progresses, we thought we would highlight the key themes and trends we observed. Dispersion has been notable and in aggregate, stocks have performed well during earnings season to-date. The weak performance of the transports industry is noteworthy in our view, including UPS, trucking stocks, and the rails, where clearly a slowdown in

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