Our view of the Equity market over the next few years calls for a choppy market that will reward Active Managers and penalize the Buy & Hold crowd. This forthcoming "choppy" market will not be a market where most Technology stocks move up or down, or where certain sectors move in unison. Rather, we are … Continue reading The Return of Active Management
Tag: investor due diligence
We are getting closer to finding a bottom but are a long way off from capitulation across the equity markets. Equity Bottom: We believe a bottom will not be found before the Fed achieves its QT run rate of $95 billion per month which is likely to occur around Labor Day. Recession: We expect the … Continue reading It’s No Longer Enough To Buy The Narrative
As equity valuations pull back and recession looms investors ought to take cover by investing in industry-leading companies led by quality management teams. The universe of such investment opportunities can't be identified by PE or cash flow multiples, dividend yields or the like. While valuation metrics are a decent filter (example: I would never pay … Continue reading Focus On Quality Management Teams
Over the past several months we have written that the new economic normal means a target CPI in the 3-4% range and muted Real GDP in the 0-2% range. Interest rates can't go back to the Volcker days as Treasury would not be able to refinance its debt at double-digit rates. We could however see … Continue reading What Will The “New Normal” Look Like?
Small cap equities and international equities are generally good places for investors to begin their work of finding undervalued companies. In this age of ultra-low interest rates and overvalued assets it makes sense for public company investors to look for value in areas of the market that receive less investor attention than sectors that garner … Continue reading For Stock Returns, Look Where Others Are Not
Over the weekend Warren Buffett stated that poor leadership is the greatest risk facing companies. Mr. Buffett is preaching to the choir and knows a thing or two about bad leadership having lived through scandal and CEO turnover at Wells Fargo while Berkshire was a large holder. Coca Cola - another Berkshire holding - hasn't … Continue reading CEO Quality Matters. Warren Buffett Agrees.
Whether evaluating a company as an investment vehicle or as a potential vendor, the processes are similar. Three elements are at the heart of our due diligence process when we evaluate Technology companies as investment vehicles and when we evaluate them as vendors. 1.) Quality of the Management Team. We listed this attribute first as … Continue reading Vendor Due Diligence and Investment Due Diligence Processes Are Similar