Category: Daily Instagraph

As the US 10 year bond yield dropped from a peak of 5% in the second half of October to 4.3% today, US Bonds had their best month of performance since the 80s. The combination of softer inflation data and more dovish comments from the Fed make it more probable that the central bank is … Continued

Billionaire investor Charlie Munger, the long-time friend and business partner of Warren Buffett, passed away at the age of 99 years. “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Warren Buffett commented. As value manager, I have always been fascinated not only by his achievements as an … Continued

The result of the success of the magnificent 7 stocks we discussed in our Daily yesterday is that it brought the level of US equity market concentration to nearly unprecedented levels. By investing in the overall market via ETFs that reproduce the market-cap weighted index, investors now buy de facto the 10% biggest stocks representing … Continued

Over the last 12 months, the US Treasury has paid 981.3 bn USD of interest charge on the US sovereign debt, the highest nominal amount since WWII. While the absolute figure is scary, we need to take into account that the US economy has grown substantially over the years and is able to absorb this … Continued

Any investor who is currently positioned for higher long-term rates is clearly betting against consensus. According to the latest BofA Global Fund Manager Survey, two thirds of the interviewed fund managers are now expecting lower long-term rates. This is the highest percentage in 2 decades. To us, the ones shorting long-term bonds currently are either … Continued

While many are enjoying a crispy turkey across the Atlantic today, plates in Germany will probably be pretty empty going forward. The judgement by the German Constitutional Court on the budget tricks made by the government was the last nail on the coffin for hopes of strong economic growth in 2024. Dependence on Russian energy, … Continued

European equities currently trade at 20 times cyclically adjusted earnings, one of our preferred valuation measures as it uses the 10 year average historical earnings and hereby levels out short term earnings swings due to economic swings. This valuation is not only below the 40 year average but also compares to a valuation of 30 … Continued

European small cap stocks are now trading at the biggest discount to Europe large caps in 20 years. This was not always the case. In fact, small caps traded historically at a 15% premium in terms of Price-to-earnings ratio due to their better earnings growth profile. We draw 2 conclusions: 1/ It is not only … Continued

Shorting equities outside of the US and going long the S&P 500 was one of the best trades of the last decade. While the relative underperformance of the stocks outside of the US continues for now, we would warn investors arriving late to the party that the undervaluation of the ROW stocks is now such … Continued

Sick and tired of the daily ups and downs of the stock market ? Take some historical perspective. Over the last 100 years, the compounded annual return of the US stock market was 10.8 ! 1000 USD invested in 1920 became 29 mil USD today through Black Friday, WWII, Bretton Woods, 9/11, a bursting Tech … Continued