Evaluar las improntas positivas de carbono, o la forma en la que un producto o servicio afecta al medio ambiente, es una buena manera de identificar empresas que proporcionan soluciones de peso para los desafíos climáticos mundiales, al tiempo que ofrecen un potencial de crecimiento atractivo. [Read More...]
Is China Past Its Manufacturing Prime?
China has been an incredible export engine of manufactured goods over the past decade and the central player of the BRICs era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed? [Read More...]
Predicting Death to Find Life in Emerging Market Stocks
Over the past year, investors have become excessively cautious about emerging markets. To compensate for the additional uncertainty, many underestimate the upside potential. Paradoxically, to get a better handle on the risks, we believe they should assume the worst. By using this “pre-mortem” approach, not only do they have a better chance of avoiding disaster, but they can also more accurately quantify the rewards. [Read More...]
Washington Woes…Again
There is no way to accurately assess the impact of the US government shutdown that began today, since we do not know how long it will last. In the past, such shutdowns have been short-lived and have not had a major economic and market impact. [Read More...]
Better Beta Is No Monkey Business
The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as the complete works of William Shakespeare. This makes perfect sense to me, but says more about infinity than it does about monkeys. [Read More...]
Are Stocks Topping Out?
With global equity market returns of well over 100% since the bottom hit in March 2009 (Display) and the S&P 500 only modestly below the record it set a few weeks ago, some investors are asking if stocks are heading for a fall. We think any number of things could cause a short-term rollback—among them, the political stalemate in Washington—but the market isn’t overpriced. [Read More...]
Passive Management ? Passive Investing
Passive investments are often misunderstood. Instead of providing static positioning as implied by the label, they can be very capricious because of market and sector turbulence. To tame a passive asset, we think investors need to exert more active control over the dynamics of volatility. [Read More...]
Equity Markets: How Much Energy Does the Bull Have Left?
After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, it’s not time to worry about the market’s stamina yet. [Read More...]
Wallflower Value Stocks Are Ready to Dance
Global equities are notching new highs, valuations are elevated and talk of market bubbles is increasingly common. Yet, by our measure, the potential for outperformance in value stocks has rarely been better. How can that be? [Read More...]
Global Investing and the European Enigma
Equity investors are struggling to figure out how to approach the European enigma. It’s clear that a recovery is brewing, but there’s still too much uncertainty for comfort. In our view, distinguishing the European context from that of the US or Japan can help point the way toward unravelling the puzzle. [Read More...]
Cast a Wider Net for Asian Income Stocks
Equity income has been a hot theme for Asian investors. But safer sectors that typically provide higher dividend yields are expensive. By casting a wider net, we think attractively priced income stocks can still be found in unexpected parts of the markets. [Read More...]
Real Estate Alpha Hides in Smaller Neighborhoods
After a spectacular five-year run, global real estate stocks look headed for a period of more normal returns. We think winning in this space will require a more discriminating eye—and venturing into the often neglected nooks and crannies of the smaller-cap real estate world. [Read More...]
Beyond the Emerging Middle Class
For many years, the rise of the middle class in emerging markets has captivated the imagination of investors. We think this is an illusion. It’s the working classes who will be the real engines of consumer growth in developing countries. [Read More...]
Alarm Clock Goes Off on Dream Stocks
Investors have recently woken up to the reality of overpriced US momentum stocks in technology and biotech. But a knee-jerk shift toward defensive sectors isn’t the answer. [Read More...]
CAPE Fears Miss the Point
With the recent wobbles in the market, scary headlines about stock bubbles are back in the spotlight. We think all this foreboding overlooks an important point: In today’s low-return world, where better than stocks to put your money? [Read More...]
Australian Value Returns to Form
Investors in Australia have been wary of undervalued, risky stocks in recent years. But today, market conditions have improved and many attractively valued companies have strong balance sheets, which we think should support a continued recovery. [Read More...]
Will Small-Cap Stocks Close the Gap with Large-Caps?
Small-cap stocks have lagged large-cap stocks by a substantial margin over the past few months, but a close look at the causes makes us think they could be in for a reversal of fortune. [Read More...]
Ten Reasons to Stay Active in Equities
It’s often hard to resist the temptation of an inexpensive, passive equity allocation. But we think you can find plenty of good reasons to go active just by looking around the markets today. [Read More...]
Valuation puzzle
Equities are expensive. It’s difficult to argue against this. But does this also mean that markets will fall sharply? Assuming that there are plenty of other factors that could drag equity prices lower, the high valuation alone is probably not enough reason for a new market correction. Granted, the price-earnings ratio is high, in some cases even historically high. The Shiller PE, which looks at corporate earnings development over the last ten years, is over 30 in the US, which happens rarely. And the graph shows that Warren Buffett’s favorite valuation indicator – total market capitalization as a percentage of GDP – also indicates historically high equity valuations. Correction looming? Are the high equity valuations the harbinger of a correction? Given the high degree of … [Read More...]
Japanese Equities: Has the Third Arrow Fallen Short?
Japanese prime minister Shinzo Abe’s latest blueprint for sustained long-term economic growth was met with quite a bit of skepticism. It’s easy to play down the so-called Third Arrow as an assortment of cryptic reform measures. But we believe that there’s some substance that warrants equity investors’ attention. [Read More...]