The leading Enterprising Investor articles from 2019 feature insights from some of the top luminaries in all of finance.
In four parts, author Yefei Lu covers specific cases from Warren Buffett’s career. Lu digs through old annual reports, Moody’s Investors Service manuals, and partnership letters to provide the reader with the key data points and metrics that Buffett would have seen when he first researched the 20 businesses. This kind of valuation work should be of great interest to equity analysts and value-minded portfolio managers.
Warren Buffett and Protégé Partners entered into a 10-year bet on whether an index fund would outperform a portfolio of hedge funds. With two years remaining, Buffett leads by a wide margin. So what does that mean for the active vs. passive debate?
Most studies of the impact of family ownership indicate that, on balance, family control is a good thing for stockholders. Family-controlled firms typically maintain a long-term perspective and strong balance sheets, and boast corporate cultures that have won the admiration of Warren Buffett. Credit Suisse has added to the body of research on family-controlled firms with the recent release of The Family Business Model, a global study which sought to better understand why family-run businesses outperform.
By now you might have seen the sensational headlines from all major financial news outlets: The Chinese stock market has finally crashed!
The burgeoning market for mergers is reflective of a lack of organic growth opportunities, cheap capital, and flush corporate coffers. Additionally, elevated stock prices provide buyers with a strong currency and sellers with a reason to cash in, which helps explain why M&A activity has tended to peak around market tops, most recently in 2007, and before that in 2000. So while the pace of deals may be a sign that CEOs and their boards are more confident about their prospects for growth, investors should be aware that their timing of late has been less than prescient. For those investors tempted to pick the next takeover target, the safer bet may be on the Wall Street bankers who are doing the matchmaking and financing. They always get paid.