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As the Q3 earnings season progresses, the overall results have been robust, particularly in the technology sector. While there are notable exceptions, such as ASML in Europe, companies like SAP have posted impressive results, largely driven by strong cloud sales. Tesla, often regarded as a tech company, also significantly outperformed expectations. These outcomes reinforce … Continued
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The soaring national debt of $36 trillion, coupled with rising interest rates, is costing the U.S. government dearly. Currently, it pays a staggering $1.2 trillion annually in interest alone, based on a 12-month rolling average. This amounts to roughly 23% of all federal revenue from taxes, tariffs, and fees. At this point, printing more money … Continued
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Goldman Sachs analysts project a 72% likelihood that the S&P 500 will underperform bond markets over the next decade. In their baseline scenario, they anticipate a modest 3% annualized return, barely outpacing inflation. Goldman attributes this drag in returns to the market’s current high concentration. At ECP, we remain committed to our strategy of selecting … Continued
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Despite the German government’s decision to shut down nuclear capacity and the Fukushima nuclear disaster, the demand for nuclear power has not waned. In fact, nuclear energy generation is surging to new heights, driven by the growing energy needs of emerging technologies like AI. At this point, a world without nuclear power is nearly unimaginable, … Continued
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Over the past three years, investor behaviour in Europe has undergone a marked shift, with a growing preference for ETFs over actively managed funds. Data from Lipper reveals nearly €500 billion in outflows from actively managed strategies, primarily from equity funds, during this period. At ECP, we see this as a compelling opportunity for stock … Continued
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Today’s analysis focuses on the relationship between the cyclically adjusted P/E (CAPE) of the S&P 500 and the inflation-adjusted returns of the index over the following 10 years. Historically, whenever such normalized valuations have reached current levels, the subsequent decade of returns for the S&P 500 has been either low or negative. If history serves … Continued
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ASML Holding NV, Europe’s largest tech company, saw its shares plummet 15.6% after reporting earnings that revealed order bookings were only half of what analysts had expected. There’s no denying that ASML is a remarkable business, developing cutting-edge technology to build the world’s most advanced chip-making machines, which are in high demand thanks to the … Continued
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This year, BlackRock’s assets under management have soared past $11.5 trillion—an amount exceeding the combined totals of the Federal Reserve’s balance sheet, the U.S. Social Security Trust Fund, and the U.S. Thrift Savings Plan. With such immense financial clout, BlackRock’s investment decisions not only move markets but also significantly influence the global economy.
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Profit levels and margins for European companies have barely returned to their pre-2007 levels, while U.S. companies have seen their profits surge by 150%, accompanied by a significant expansion in margins. The valuation premium and multiple expansion of U.S. equities is well-justified by the fact that American companies have outperformed their European counterparts since the … Continued
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Valuation is crucial—both historically and statistically. Research from Bank of America (BofA) shows that 80% of equity returns over the next decade can be traced back to the valuation at the time of investment. This study, based on data from 1987 to the present for the S&P 500, underscores the long-term importance of entry price, … Continued