The Financial Sector: A Giant Octopus and its Tentacles
Not since the oil shock of the early 1980s has a single sector accounted for such a large percentage of market earnings—what does this mean for investors?
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Pension Fund Deficits
Pension fund deficits, which remain heavily concentrated among a handful of firms, are just starting to impact the bottom line, while the longer-term implications for all investors may be a shift in asset allocation.
Reality Earnings
Despite the steady stream of financial scandals and revelations of conflicts of interest on Wall Street, the game of beating analyst projections continues.
Bear Market Rallies
Given the explosiveness of past bear market rallies, investors should rebalance instead of sitting in cash or assuming a prospective rally represents the start of a prolonged recovery.
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.
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?