Volatility is back. The Shanghai Composite is down -30% from its January high, and the broader MSCI Emerging Markets Index is also down -25% JD.com (JD) In early September, news came out that Richard Liu (Founder & CEO) was accused of sexual assault while completing a course at the University of Minnesota. Since initial reports, […]
Review and Outlook In January, fueled by tax cuts and synchronized global expansion, PMIs rose, economic growth estimates were revised upwards along with corporate earnings, and stocks surged across the board, especially growth stocks In February, volatility spiked to record levels and stocks dropped precipitously after a series of technical dominoes fell into place After […]
Continue Reading
Had positive net returns of 3% for the quarter, bringing YTD returns in excess of 12% Box, Inc (BOX) Online file storage is a “bad” business as there is little value add and it is effectively a commodity Founders of Box began to focus on the enterprise customers and particularly companies in regulated industries Large […]
Continue Reading
Up 12.65% 3Q18 and 112.5% YTD 9/30/18 vs. 7.71% and 10.56% for S&P 500 during 3Q18 and YTD, respectively In Q3, fear, uncertainty, and doubt dominated as concerns of an emerging market contagion coupled with a trade-war induced China deceleration blanketed the media The argument was easy to make, slower growth means lower oil demand, […]
Continue Reading
Natural gas storage is at record low levels but prices are falling going into winter heating season. Markets seem to be betting that wellhead supply will be sufficient to cover demand this winter. That may be but at what gas prices? Natural gas 6-month calendar spreads moved in backwardation in early September and climbed to […]
Continue Reading
Comparative inventory: The most important approach to oil & gas price formation Comparative Inventory (CI) is the difference between current stock levels of crude oil and select refined products, and their 5-year average CI has accurately predicted most of the changes in oil pricing since the 1990s when inventory data first became public This is […]
Continue Reading
US Equity Markets Remain Very Expensive (based on our 28-year valuation history) S&P 500 and Russell 1000 are both in the 15th percentile towards expensive When markets have been at these levels in the past, one-year forward returns have averaged 2-4% and two-year forward returns have averaged 7-9%, which is well below normal returns historically […]
Continue Reading
Lost 9.1% during the quarter, bringing YTD loss to 25.7% On August 31, sold the last of our Apple stock at $228 per share. First purchase was on May 10, 2010 at a split adjusted $36/share. Apple investment compounded annually at 26% and earned the partnership over $1 billion Considering we are almost a decade […]
Continue Reading
Track the Markets: Winners and Losers; Compare the performance of selected global stock indexes, bond ETFs, currencies and commodities (YTD and Current Quarter) – WSJ “Current stretch of European underperformance is unprecedented both in length and magnitude; earnings recovery is coming back very strongly and Europe’s operational leverage is vastly underappreciated; discount to the US […]
Continue Reading
In investing, the opportunity to buy an asset or make a loan goes to the person who’s willing to pay the highest price, and that means accepting the lowest expected return and shouldering the most risk In 2005-06, Oaktree adopted a highly defensive posture. We sold lots of assets; liquidated larger distressed debt funds and […]
Continue Reading