Newsletter - September 6th, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. below net current asset value, below tangible equity, etc.) but don’t meet our investment criteria - and our reasoning.

This may help you avoid some ‘value traps’, and stocks that aren’t sufficiently attractive compared to opportunities available today.

For reports of stocks that pass our quantitative and qualitative standards:

Join Here

Wealthtrack - Richard Bernstein (Part 2 of 2)

Bernstein is an experienced macro-strategist (an area we don't normally focus on). Notes on part two of his interview below:

2:45 Think in Cycles

The market moves in cycles that rhyme with the past (though never identical).

Beware of the use of "unprecedented", "new era", etc. to describe financial markets - they're usually used to justify bull markets.

AI will likely transform the economy but it's also likely to result in a financial bubble before it bursts. Excitement results in over-pricing of stocks that leads to speculative disasters.

9:00 Diversification means owning assets you don't want

Bernstein has an interesting take that diversification results in holding assets you don't want - as an insurance policy in case you're wrong. Nobody likes paying the premium but that's the point of added safety.

Our view is slightly different - though we don't have enormous conviction on just a handful of stocks, we rely on diversification to let the law of large numbers come into play - and achieve the expected result.

10:30 Extend time horizon for fundamentals

The longer you extend your investment time horizon, the better the likelihood of fundamentals driving your performance. These are relatively simpler to study, and implement as an investment policy.

15:30 Leading indicators

If you're focused on macro-economic factors, focus on leading indicators rather than lagging such as: weekly initial jobless claims, building permits, etc.

Bernstein also advises investors to focus on profit cycles rather than economic cycles since that's what matters to investors. Each industry has its own profit cycle depending on demand/supply dynamics.

20:30 Fixed income

Long-term bonds may not be a good option for the foreseeable future due to potential inflation. However, short-term bonds and cash can still serve as a financial cushion in most portfolios.

For reports on the best investment values in stocks worldwide:

Join Here

Wish you an excellent week ahead.

Newsletter - September 6th, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. below net current asset value, below tangible equity, etc.) but don’t meet our investment criteria - and our reasoning.

This may help you avoid some ‘value traps’, and stocks that aren’t sufficiently attractive compared to opportunities available today.

For reports of stocks that pass our quantitative and qualitative standards:

Wealthtrack - Richard Bernstein (Part 2 of 2)

Bernstein is an experienced macro-strategist (an area we don't normally focus on). Notes on part two of his interview below:

2:45 Think in Cycles

The market moves in cycles that rhyme with the past (though never identical).

Beware of the use of "unprecedented", "new era", etc. to describe financial markets - they're usually used to justify bull markets.

AI will likely transform the economy but it's also likely to result in a financial bubble before it bursts. Excitement results in over-pricing of stocks that leads to speculative disasters.

9:00 Diversification means owning assets you don't want

Bernstein has an interesting take that diversification results in holding assets you don't want - as an insurance policy in case you're wrong. Nobody likes paying the premium but that's the point of added safety.

Our view is slightly different - though we don't have enormous conviction on just a handful of stocks, we rely on diversification to let the law of large numbers come into play - and achieve the expected result.

10:30 Extend time horizon for fundamentals

The longer you extend your investment time horizon, the better the likelihood of fundamentals driving your performance. These are relatively simpler to study, and implement as an investment policy.

15:30 Leading indicators

If you're focused on macro-economic factors, focus on leading indicators rather than lagging such as: weekly initial jobless claims, building permits, etc.

Bernstein also advises investors to focus on profit cycles rather than economic cycles since that's what matters to investors. Each industry has its own profit cycle depending on demand/supply dynamics.

20:30 Fixed income

Long-term bonds may not be a good option for the foreseeable future due to potential inflation. However, short-term bonds and cash can still serve as a financial cushion in most portfolios.

For reports on the best investment values in stocks worldwide:

Wish you an excellent week ahead.

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