Who Will Be First Out of the Bunker?
Attractive opportunities abound (in equities and especially in credit), but the pervasive economic gloom will get worse before it gets better. Download PDF
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U.S. Venture Capital Investing
While the recent uncertainty and volatility in economic and financial markets have made it difficult to ascertain the outlook for the venture capital market, these conditions may also serve to create a better supply/demand balance down the road. We continue to regard select high-quality venture capital managers as an effective means to capture returns from…
The Case for Investment-Grade Corporate Bonds
Today’s economic environment and current yields and spreads make investment-grade bonds an asset class worthy of consideration, but this would be a tactical bet with potentially significant downside if the exit is poorly timed.
U.S. Equity Style Performance – It’s All Relative
Market leadership shifted abruptly toward high-quality mega-cap stocks over October and November, yet despite the sharp recent improvement in relative valuations of small caps and value stocks, we still think it is too early to switch from a defensive high-quality portfolio in the current environment.
High-Yield Bonds – Toxic or Tasty?
The default outlook for high-yield bonds is dreadful, but with more than two-in-three issues trading at distressed levels, today’s yields already price in depressionary conditions.
What Does History Tell Us? Putting the Current Market into Context
While the current sell-off is in line with previous major bear markets of the postwar period, it is extreme in its speed and volatility. Precedent would suggest that markets will remain under pressure for the immediate future, but unless you assume we are on the verge of a 1930s’ style bust, equities are poised for…
The Case Against Containment
While many pundits expect the financial sector’s problems to remain “contained,” we not only expect the bear market to spread beyond financials, but believe the economic damage may be greater than that inflicted during the downturn of 2000–03.
U.S. Financials: Catch a Falling Knife?
Despite low valuations, U.S. financial stocks will likely remain a “value trap” until greater clarity emerges as to the ultimate magnitude of losses facing the financial system.
Large Firms Stepping Off the Share-Buyback Treadmill
After years of supporting share prices and EPS growth with increasingly aggressive share-repurchase programs, companies are showing signs of buyback fatigue.
The Fed’s Reflationary Effort: Will It Work And What Are The Risks?
While the Fed is committed to a policy of reflation, market conditions pose significant obstacles to success and there are also serious inflationary risks associated with this policy.