Morningstar Stars: 5 Star Supernovas
Warren Buffett states, “In the business world, the rearview mirror is always clearer than the windshield.” And even though investors are constantly bombarded with the standard compliance warning that past performance is no guarantee of future performance, it should come as no surprise that many can’t help but chase the hottest asset class, sector or stock, often to their financial detriment.
In this Special Report, we discuss Morningstar’s rating system and remind that we think the best advice is to find a strategy with a history of success (Value and Dividends, perhaps?) and stick with it through thick and thin!
The Most Wonderful Time of the Year
With the calendar about to roll past Halloween, we look forward to the start of the seasonally favorable six-month time span. While we have long thought that the only problem with market timing is getting the timing right, and we are always focused on the long-term prospects of our stocks, we do not mind that November to April is the period in which the equity markets typically perform well.
To learn more about what history has to say, and to see 12 stocks that we presently find undervalued, we encourage you to peruse our latest Special Report, The Most Wonderful Time of the Year. We hope it will bring you holiday cheer!
Where To Invest In 2021 – Mid-Year Update
Nothing ever goes exactly as planned, but the first half of ’21 for the U.S. equity markets went even better than most would have hoped. To be sure, as we wrote in December 2020 in our Market Outlook (Where to Invest in 2021), we thought the year would be favorable for equities in general and inexpensively priced stocks in particular.
Such was the case over the first two quarters of 2021, but Value has taken a bit if a breather since the advent of summer, which we think affords another opportunity to add undervalued stocks to portfolios. In addition to the seven investment themes we highlighted at the end of 2020, we have just added three more in our latest Special Report entitled Where to Invest in 2021 – Mid-Year Update.
Value Manager Names His Faves: 6 Themes, 24 Companies
In Value Manager Names His Faves: 6 Themes, 24 Companies, John discusses our value-based investment philosophy, while also offering favored areas of the equity market in which to invest and specific stocks that he and the team find particularly attractive.
Death & Taxes, but Not Death from Taxes
We think the tax rate analysis is eye-opening and, as is often the case, we believe it supports an emphasis on Value stocks in one’s asset allocation mix. We like the perspective offered by Vannevar Bush, “Fear cannot be banished, but it can be calm and without panic; it can be mitigated by reason and evaluation,” and we think this quick-read report is well worth a look.
We even offer a listing of 10 undervalued stocks that are already paying an elevated tax rate, suggesting that their bottom lines might not be so heavily impacted by a hike in the corporate tax rate.
2021 Market Outlook
Even as the equity markets showed remarkable resiliency this year, rebounding strongly from a massive five-week Bear Market that ended March 23, 2020, we suspect that most will be happy to see the calendar turn to 2021. This is especially true as significant progress on COVID-19 vaccines, we think, will provide a favorable stock market environment in the new year, especially for inexpensively valued companies.
Election 2020: Racing towards November
As the 2020 presidential election campaign heats up and polls show Joe Biden holding a lead of 7.5 points (49.2% to 41.7%) over President Trump, while the betting odds suggest a tighter spread, we must caution that the race is far from over. Indeed, pollsters and oddsmakers are hardly infallible as just four years ago, Hillary Clinton led Donald Trump in the presidential race by four or five percentage points one month before Americans cast their ballots. Market historians, and perhaps everyone, should be thrilled to see the page turn to 2021, even as the winner of the Oval Office will still be dealing with COVID-19, as well as political and economic uncertainties.
Epidemics: COVID-19 Not the First, Nor the Last
In this report, we offer perspective on epidemics and the equity market turbulence associated therewith as we have long believed that the secret to success in stocks is not to get scared out of them, while we are always focused on the long-term, multi-year prospects of the businesses in which we are invested. Happily, capitalism’s immune system is quite strong.
Turbulent Markets: Act Quickly and Do Nothing
In this report, we identify a few of the most common events which have historically caused temporary market disturbances. These events could easily deter you from staying on track with your long-term investment plan. But historical data suggests that doing nothing can be the best course of action.
The Value of Dividends
Dividend income and its reinvestment has comprised a significant portion of long-term stock gain. Dividends today compare very favorably to income that can be generated from competing investments as the S&P 500 yields 1.8%, a smidge less than the yield on the 10-year U.S. Treasury (as of 12.31.19), while the yield for Value stocks (represented by the Russell 3000 Value index) is some 70 basis points higher at 2.5%.