Commodities: Balancing the Economic Possibilities
Commodities could provide valuable portfolio protection in the event that central banks, focused on using liquidity to fend off deflation, incite a bout of unexpected inflation.
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U.S. Equity Valuations: Improving But Not Enough
Using normalized earnings to value U.S. equities suggests they remain overvalued.
Where’s the Economy Heading?
Although the current slowdown has thus far been more moderate than other postwar slowdowns, further weakening could precipitate unusually harsh consequences.
U.S. High-Yield Bonds: Head Fake or Bull Market?
Will high-yield bonds post outsized gains as they did in 1991 when they returned nearly 50%?
U.S. Buyouts Investing
This report examines the recent market environment for buyout investing using the following criteria: fund raising and commitments, financing, valuations, and exit opportunities. Exhibits cover capital commitments, LBOs, M&As, and returns to limited partners of private equity firms.
The Fallacy of the Fed Model
Why is the Fed Model conveying such different notions about equity valuations compared to other measures?
Deflation in Japan–Could it Happen in the U.S.?
According to a recently issued Federal Reserve paper, Japan could have averted deflation if it had aggressively applied monetary and fiscal stimulus during the first half of the 1990s. This Comment provides highlights of the paper, the commentary it elicited among financial pundits, as well as our thoughts about its policy recommendations if they were…
U.S. Convertible Securities Investing
Does the hybrid equity-debt structure of convertibles add real value or simply create unneeded complexity? Topics discussed include the economic basis for returns, market composition, valuations, convertibles’ role in policy portfolios, and benchmarking issues.
Making Sense of U.S. Equity Earnings (Addendum)
S&P Core and NIPA earnings address many of the shortcomings associated with reported (GAAP) and operating earnings.
Asset Allocation in a Bear Market
This paper speculates that while some of the excess from the equity bubble years has been worked off, the secular bottom will probably not arrive until valuations improve and despair reaches levels proportional to the preceding bull market euphoria.