📑 Research Notes for 2021-12-20
This week, we look at global value spreads, COVID as a seasonal cold, other central bank actions globally, and challenges with value investing.
We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.
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Global Value Spreads Reach New Levels.
(AQR)
Spreads are constructed using a hypothetical AQR value composite that includes five value measures: book-to-price, earnings-to-price, forecast earnings-to-price, sales-to-enterprise value, and cash flow-to-enterprise value.
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COVID Becoming More Like Seasonal Flu.
(Wall Street Journal)
Johns Hopkins Bloomberg School of Public Health Professor and Virologist Andrew Pekosz discusses U.S. vaccination rates, managing the spread of the coronavirus, and what comes next for Covid-19.
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Central Banks Around the World Raise Rates as Fed Prepares Move.
(Wall Street Journal)
Central banks across swaths of the globe are continuing to raise interest rates in an effort to tame inflation, largely dismissing, for now, the threat to economic growth posed by the spread of the highly infectious Omicron variant.
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Winner's Curses and Discounted Cash Flows.
(Bormann Wealth Management)
The winner's curse remains a serious problem for some strands of investing. Consider classical value investors, whose philosophy goes something like this: We seek to identify companies that are priced at a substantial discount to what we consider to be their underlying business value – and then we patiently wait for the gap between price and value to narrow.
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Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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The information presented in this newsletter is for educational purposes only and is not a solicitation or recommendation for any specific security, product, service, or investment strategy.
Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with a qualified financial advisor, tax professional, or attorney before implementing any strategy or recommendation you may read here.