A Massive Liquidity Illusion

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Since the election we’ve heard the rally in stocks characterized as a “Trump Trade” or a “reflation” trade. We think there is a really important element missing from this analysis that could change very quickly over the next several weeks. On March 16, 2017 (the day after the Federal Reserve is expected to raise interest […]

Putting the Snap IPO into Historical Context

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The Snap IPO has garnered a fair amount of coverage over the last two days so we thought we’d put some data behind the phenomenon. The most striking thing about the Snap IPO is clearly the valuation. Snap doesn’t have any earnings, but it does have a modicum of sales. After two days of trading […]

Q&A with Author Peter Zeihan: How Shale is Reshaping America and the World

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We recently met with geopolitical strategist Peter Zeihan to discuss world events since the American election and his new book, “The Absent Superpower,” released last month. In the book, Peter credits energy and resource innovations with reshaping the global geopolitical environment. He predicts by 2019, US oil production costs could drop to $25 per barrel, […]

Why Hitting 2% Real GDP Growth Is Key For US Corporate Profits

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While the myth that stock market returns are highly correlated to a country’s GDP growth rate has largely been debunked, there remains a strong, and intuitive, relationship between corporate profits and GDP. GDP measures the output of an economy and corporate profits are simply the income to capital owners derived from that output (with some accounting adjustments made along the […]

Companies with the Lowest Dividend Yields Are Driving Performance

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In the month of January, the most important factor correlation to performance of developed market stocks has been dividend yield (DY). Interestingly, though, the best performance has been generated in those stocks that belong to the lowest decile (those that pay a smaller dividend relative to their share price) while those with the highest DY have […]