Category: DAILY INSTAGRAPH

Europe remains by far the cheapest developed equity market not only compared to the US and Japan but also compared to its 20 years history. What is little known however is that European companies have outperformed their US peers in terms of profit growth since 2021, especially once excluding the Magnificent 7. Why that?  Amongst … Continued

The below table summarizes the y-t-d returns ( in USD ) of the major liquid asset classes till mid-February. It is of course still too early to draw any conclusions for 2024, but noticeably the biggest positive performers were oil, US and Japanese equities. The biggest losers were Asia ex Japan, industrial metals and government … Continued

Meta stock gained 20% or a stunning 171 bn USD in market cap on its results last Friday, in a single trading session! This brings Meta into the league of the 10 companies having experienced the biggest daily increases in market cap ever. You will recognize in the same club other ‘Magnificent 7’ companies. To … Continued

The Magnificent 7 continue to pull the S&P 500 ahead. Even we, as value investors, need to admit that their stock market performance was mainly driven by outstanding earnings growth and not by multiple expansion. Going forward, consensus expects the Magnificent 7 to grow their topline at 12% a year over the next 3 years. … Continued

As Warren Buffett wrote in his 2020 annual letter: “Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” Equity returns are a good proof of the strength of corporate America as illustrated by the yearly returns of the S&P 500 over the last century. Not only … Continued

Since the financial crisis, European stock-markets have dramatically underperformed their US peers. Multiple reasons for this: a lack of technology companies, structural & political issues and, last but not least, a European debt crisis in 2009. It is worth highlighting that European stocks have not always been performance laggards. In the 2 decades from 1989 … Continued

As second theme of our quarterly house-view we expressed our opinion that central banks arrive to end of their rate hiking cycle. Question now becomes when central bankers are going to cut rates. Here, the Fed Chair Jerome Powell was as clear a central banker can be yesterday stating that a March cut was “not … Continued

One of the newcomers in our European Value Fund in Jan 2024 is the Swiss small-cap Zehnder, a leading player in European radiator and ventilation markets. This family-owned business is shifting its business away from the commoditized radiator business into innovative heating, cooling and air purification solutions, all segments with attractive growth rates. We think … Continued

The historical average performance of the S&P 500 in US presidential election years since WWII gives a recomforting picture as, on average, markets were up about 7%. Markets started to react positively to the election campaign from March in the election year, with Democratic Presidents being better received by Mr Market than their Republican counterparts.

The old saying goes: “You do not buy insurance when your house is on fire.”. Investors currently judge the risk of a market correction as very low, at least when looking at the derivatives market. The current cost of insurance of a 3 months 95% S&P 500 put stands currently at 0.82 bps, the lowest … Continued