Practical analysis for investment professionals

Howard Marks


Weekend Reads for Investors: Signals from Silicon Valley

US stocks reached a notable milestone earlier this week when the bull market turned six years old. As Charlie Bilello of Pension Partners notes, only twice in its history has the S&P 500 Index recorded a better six-year stretch.

13F Watch: In Defense of Active Share

The poor performance of active management has been well chronicled of late but the active fund management industry is not going down without a fight. Apologists have been quick to point to artificially low interest rates as one factor dragging down the collective returns of stock pickers. Index huggers — those managers with low tracking error funds and almost no hope of outperforming their benchmark after fees — are also to blame. In response, active managers are pointing to their “active share” — a measure of how much a portfolio’s holdings differ from those of its benchmark — and research that suggests funds with the highest active share do indeed beat their benchmarks. A review of just-filed quarterly 13F reports reveals that some of the most prominent fund managers truly embrace their role as active portfolio managers.

Weekend Reads for Investors: Howard Marks on Risk and the “Zone of Imprudence”

Equity fund managers are underperforming their benchmarks again this year, continuing a trend that started sometime shortly after the Big Bang.

13F Watch: Shareholder Activism Pays

When compared to the hedge fund industry at large, activist investors have garnered a disproportionate share of the headlines this year, and for good reason: they’ve been busy — launching 148 activist campaigns in the first half of 2014 alone — and they continue to outperform their hedge fund peers.

13F Watch: Activist Investors Fill the Void

Thanks to a bull market and strong relative returns, assets under management for activist investors have swelled — tripling in just the last five years — allowing these high profile fund managers to launch more campaigns and take on bigger companies.

Weekend Reads for Investors: Diverge From the Herd

Oaktree Capital’s founder and chairman Howard Marks publishes periodic memos that are widely considered “must reads” for those in the investment industry, and his latest missive should be no exception. In ” READ MORE ›

Weekend Reads for Investors: Five Years and Counting

In a recent speech, Federal Reserve Bank of Dallas president Richard Fisher aptly remarked, “Stock market metrics such as price to projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP are at eye-popping levels not seen since the dot-com boom of the late 1990s.”

13F Watch: Rising Profile for Activist Investors

Activist investors have significantly raised their profiles in recent years. According to Activist Insight, there were 237 activist campaigns launched in 2013, up from less than 30 in 2000. And while activists used to fly mostly under the radar, many have now embraced new media platforms as a way to make their cases heard.

Keep Looking for Growth

Michael Lipper, CFA, discusses one of his lessons for students of the market; pay more attention to the laggards than the current leaders when searching for future leaders.

13F Watch: Buffett Buys Exxon Mobil, Ackman and Berkowitz Target Fannie and Freddie

The latest quarterly filings show that fund managers as a group increased their technology exposure while trimming consumer staples and financials.



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