Winston Churchill has been quoted as once saying, “There’s nothing more exhilarating than to be shot at and missed.” Such must be the feeling of investors today who found recently they had rather more exposure to falling crude oil prices than previously thought. Chevron just announced the indefinite suspension of a project in the Canadian […]
Another day and another new low for crude oil. Since stocks are moving with oil, trying to figure out the short term direction of the equity market requires being an oil trader. Few of us are any good at this although it’s easy to have an opinion. For our part, we don’t bet on the […]
A couple of months ago Roger Ibbotson and I were both presenters at a CFA Conference in Toronto. Ibbotson is a professor of Finance at Yale School of Management and also chairman of Zebra Capital Management, an investment firm whose style of investing reflects his work. Liquidity as an Investment Style was the title of […]
The chart below shows the performance of different sectors of the equity market so far this year. Of course, there are always sectors that are outperforming, so nothing much new there. However, if in general as an investor you don’t commit much to health care and you are overweight energy, recent months have likely given […]
Harold Hamm, CEO of Continental Resources (CLR), has most recently been in the news because of his $995 million divorce settlement, which his wife is appealing. Far more interesting though, was Continental’s recent decision to remove all of its hedges on future oil production. Closing out the short positions in oil futures generated a one-time […]
There has been plenty of concern recently that the drop in oil prices would cause many domestic E&P names in the U.S. to curtail their activities at marginal plays. This in turn would have a knock-on effect on oil servicers and the MLPs that manage and build energy infrastructure needed to exploit America’s shale boom. […]
I was struck the other day by some of the commentary on Seeking Alpha surrounding American Realty Capital Properties (ARCP). ARCP is a REIT. Their chairman is Nick Schorsch, who is also chairman of American Realty Capital which is built around the origination and distribution of non-traded Real Estate Investment Trusts (REITs). While conventional, publicly traded REITS have their […]
Seasonal patterns to the returns of most asset classes rarely seem to last beyond their discovery. “Sell in May and Go Away” has been shown to either work or not work depending on precisely when you close the trade out. Rather than the Summer being a bad time for stocks it’s just that September is […]
About a year ago our newsletter compared the valuation of IBM and Amazon (AMZN). At the time IBM had a P/E of 10X (AMZN’s was 166X), was growing Free Cash Flow (versus flat at AMZN) and seemed wholly more attractively priced than AMZN. As we noted then, we owned IBM and not AMZN, where we think that […]
Assuming you’re not the type of investor whose mood is synchronized with the daily gyrations of the stock market, October has been an interesting month. Although it’s not over yet so of course anything can happen, to this point October looks like a big, short-lived margin call. Leveraged investors and those who like to hedge […]
