Research

This document is meant for those who want to sit down for 60-90 minutes, once a month, and take full stock of major issues impacting US equities.  It includes a summary of all our idea generation, risk management, and macro data and services. For further information on our Quantitative Frameworks or to view our full

We have been surprised at how well the industrials sector has performed year-to-date.  Typically, when the market is down, industrials lag, as they are economically sensitive and often have high fixed costs which can be decremental to profits. Before 2022, industrials had underperformed the market 13 of the previous 14 times, (and the last eight

Today’s work shows our top long and short ideas, which include… 202211_Trivariate_Stock_Ideas-1Download

Banks have performed relatively well in the last one, three, and six months.  Yet, we can do 25 meetings with investors over a two-week span and have no one even ask about banks. One analyst recently told us – “I have no idea what I am rooting for.” In today’s work we analyze banks the

The market has rallied over 8% this month — which ordinarily would be considered an expected annual rate of return — with massive inter-industry dispersion. Energy is up 24% this month, while autos are down 10%. Most of our investor meetings this week (in both Boston and New York) focused on trying to find buy

Last week we wrote about how the restrictions managers make to their investable universes can significantly impact their performance. For instance, in a “restricted” universe of stocks based on liquidity and size, and eliminating “macro” sectors, 16.1% of stocks in the last 12 months have beaten the market by 20% or more, and 35.3% have

We are in a period of quantitative tightening, a hawkish Fed, rising inventory levels, and estimates that are likely excessively optimistic.  All of this has fueled one of the worst six-month stretches in a century for US stocks.  “High quality” businesses are down as much as “junk” businesses.  Given the broad sell-off, clients have asked

Trivariate’s research and advice centers around risk management. Today’s level set illustrates why decisions made by Chief Investment Officers (CIO) and Portfolio Managers (PMs) about portfolio construction and risk management can be far more important than bottom-up stock picking. Experienced bottom-up stock pickers have struggled to generate alpha over the last 18 months. Their process

With the NASDAQ down over 33% YTD, we believe it is a good time to evaluate the technology sector the Trivariate way – by analyzing the available alpha, macro relationships, quantitative signals, and fundamentals to see if the valuation reset has created any compelling dislocations or specific sub-industry, style, or stock opportunities.   Available alpha

Mixed sentiment: Sentiment continues to fluctuate as rapidly as the market indices heading into Q3 earnings season, but we think rhetoric is more negative than positioning. Investors started the quarter in a dour mood after one of the worst six-month periods for equities in the last one hundred years. Until Q2 and Q3 of this