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When laggards become leaders
One of my favorite times to buy stocks is when a sector that has lagged the broad stock market for a while ("the lagging sector") begins to outperform it.Specifically, I look for situations in which 1)...
View ArticleBook review: "Dead Companies Walking" by Scott Fearon
Scott Fearon is a successful investor from California. Dead Companies Walking chronicles his thirty-year career as a stock analyst, manager of a mutual fund, and finally manager of a long/short hedge...
View ArticleBook summary: "King Icahn" by Mark Stevens
Below is a summary of Mark Stevens's King Icahn, a biography of Carl Icahn. It's an interesting book about an interesting guy, and I've tried to capture the highlights.Early life and careerCarl Icahn...
View ArticlePredicting long-term winners is difficult
In the past few years, compounders—companies that can steadily compound their earnings and equity value over long periods of time—have captured investors' attention.The allure of compounders is easy to...
View ArticleBook review: "The Very, Very Rich and How They Got That Way" by Max Gunther
Before Forbes began publishing its list of the 400 richest Americans, Fortune magazine compiled its own annual rich list. Max Gunther's The Very, Very Rich and How They Got That Way profiles fifteen...
View ArticleArticles of interest
AircraftRussell Clark of Horseman Capital warns about risks in the aircraft-leasing market.BankingNate Tobik from Oddball Stocks describes what makes a bank successful and how he's playing an expected...
View ArticleBook review: "Capital Returns" by Edward Chancellor
Marathon Asset Management is a successful investment manager in London. It manages seven funds with long track records and, remarkably, each fund has beaten its benchmark by a wide margin over the past...
View ArticleBook review: "Everybody Wins! A Life in Free Enterprise" by Gordon Cain
Despite what its title suggests, Everybody Wins! A Life in Free Enterprise isn't an encomium to capitalism. Instead, it's the autobiography of Gordon Cain, a businessman who led four leveraged buyouts...
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A reason for caution
I'm cautious about the stock market because credit growth has stalled. Since December, total bank credit in the United States has fallen slightly:This is important because, in my opinion, credit is the...
View ArticleArticles of interest
AgricultureHarvest Investor writes about trends in agricultural productivity and their likely effect on the farm economy.AircraftGeorge Dimitroff describes how the 1990 recession and September 11, 2001...
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Just say no to tobacco stocks
Last year, Credit Suisse published research claiming that the tobacco industry was the best-performing sector of the American stock market from 1900 to 2010. Similarly, Jeremy Siegel wrote in his 2005...
View ArticleThe importance of quickly eliminating bad prospects
Last year, Matt Brice wrote a nice article called Think Fast – Lessons for Dating, Investing. The article's message is that, whether in love or investing, people should eliminate bad prospects quickly...
View ArticleFive reasons not to buy Amazon
I think Amazon is a bad investment at today's price of $1025 per share, which is 157 times its estimated 2017 earnings, and I recommend that investors either avoid buying it or, if they already own the...
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The permabears are right about buybacks and ZIRP
As the stock market has moved from record high to record high, a small but vocal group of permabears has argued that the market's strength is unsustainable. Two claims they've frequently made are that...
View ArticleA critical reappraisal of "Margin of Safety"
A few years ago, I wrote a favorable review of Seth Klarman's Margin of Safety. I recently re-read the book, and today my opinion of it is far less charitable. There are three reasons for that:1. It's...
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Anti-trust lawLina Khan from Yale Law School describes how Amazon is vulnerable to changes in anti-trust philosophy.Wired reports that as leading internet companies become more powerful, some...
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Auto lendingThe Wall Street Journal reports that used-car prices have been resilient in 2017 despite a sharp increase in expiring leases.ChinaBrad Setser critiques the popular argument that China's...
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Thoughts on convertible bonds
A convertible bond becomes “busted” when the issuer's stock price falls so far below the strike price as to render the conversion feature nugatory. When this happens, the convertible begins to trade...
View ArticleBook review: "Long-Term Front-Running" by Michael Fritzell
Many stock traders try to make money by predicting the immediate future: Will tax reform spark a stock-market rally? Will Apple beat earnings estimates next quarter? Et cetera.Long-Term Front-Running...
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Will tight monetary policy and loose fiscal policy push the dollar higher?
I recently read Jack Schwager's trader-interview book The New Market Wizards, which includes an interview with Stanley Druckenmiller. Many people consider Druckenmiller one of the best investors alive,...
View ArticleThe new Nifty Fifty: today's one-decision stocks
On Twitter, Ryan P. Dolan asks, "If we are in a Nifty Fifty 2.0 environment, beyond the obvious members (AAPL, AMZN, GOOG, MSFT, FB, NFLX, TSLA, MA/V, etc), what other companies would you include?"It's...
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After years of underperformance, are value stocks worth buying?
Last month, Sean Markowicz of Schroders wrote an article titled "Where's the value in value investing?" Mr. Markowicz mentions that before the 2007-08 financial crisis, value stocks almost always...
View ArticleBook review: “The Myth of Capitalism” by Jonathan Tepper
The Myth of Capitalism is an upcoming book--it's set to be released later this month--that I highly recommend. The myth in the book's title is idea that Americans live in a free-market economy, while...
View ArticleStay away from popular tech stocks
Today, America's five largest companies by market capitalization are all well-known technology and internet businesses: in descending order, Apple, Amazon, Microsoft, Alphabet (the parent company of...
View ArticleStay away from popular tech stocks, part II
Last August, I wrote a blog post arguing that largest technology and internet companies -- Amazon, Apple, Facebook, Google, Microsoft -- would never grow into their collective market capitalization....
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