Equity Investments

344 Posts

Is It Time to Stock Up on Struggling Retailers?

Is It Time to Stock Up on Struggling Retailers?

Many retailers enjoyed a robust holiday season. Investors looking to capitalize on these glad tidings might be tempted to consider some of the bargain stocks in the sector, especially those that have faltered in recent years, such as JC Penney (JCP) and Sears (SHLD), or even deeply troubled firms, such as RadioShack (RSH) and Wet Seal (WTSL). Not to play the Grinch, but history suggests this would be a terrible idea. Read more

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Connecting the Dots: From US Shale Oil to London Real Estate

Connecting the Dots: From US Shale Oil to London Real Estate

What do the US shale oil play and London real estate have in common? A lot, it turns out. And if oil prices keep falling, the London (and for that matter Paris) property bubble(s) will burst. So, if you want to avoid the carnage or short real estate bubbles, builders, or banks in Europe, focus on the US energy sector and OPEC. Many investors are blinded by too narrow a focus, something I call micro-macro bias. Read more

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Aswath Damodaran: The Most Reliable Investment Valuations Balance Numbers and Narratives

Aswath Damodaran: The Most Reliable Investment Valuations Balance Numbers and Narratives

When it comes to valuing stocks, the most reliable valuations come from imaginative number crunchers and disciplined storytellers, says Aswath Damodaran. And too often pure “numbers” people drift off into what he calls “spreadsheet nirvana.” Similarly, investors who focus purely on the narrative of a potential investment run the risk of quickly “veering from reality to fantasy.” Damodaran urged investment managers to bridge the gap between numbers and narratives, insisting that the best valuations are not just “a collection of numbers, but a story connected to numbers.” Read more

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Turning Points: The Status Quo Is Changing

Turning Points: The Status Quo Is Changing

The status quo is changing markedly. Oil prices are heading south as the United States ramps up production and OPEC refuses to cut to compensate. Moreover, global demand is looking sluggish with weakening growth in Europe, Japan, and China. The weakening of Chinese demand suggests that there could be a regime change taking place whereby the global driver of commodity demand is declining at precisely the moment when the expansion of global supplies is finally arriving. Read more

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