News

TTCM Newsletter

Our newsletter explores emerging trends and important news.  Stay current on the subjects that affect your money and investments.  Explore the wide range of topics in our newsletter by clicking any of the links below.

Improving Fundamentals and Cheapest Valuations since 2009

Earnings season has begun and thus far almost every one of the banks that have reported have beaten their earnings estimates.  The stock prices haven’t yet reflected the improving metrics, but over time prices follow business fundamentals, so there will be convergence.  ALLY Financial posted an absolutely sensational quarter this morning with record earnings and...
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Retirement Income Opportunities and Challenges

As we retire or get closer to retirement, the need to generate investment income takes on a much greater importance.  Historically, it was much easier, as one could divert a larger portion of their stock portfolio into bonds, while capturing yields that might vary from 5-10%.  Those yields, combined with the nearly 40-year bull market...
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President Trump and First Lady Test Positive for Covid-19 and Stimulus Talks

Last night, it was announced that the President and First Lady tested positive for Covid-19.  We aren’t sure how symptomatic they are thus far but of course it adds uncertainty to an already tense time.  Hopefully they, and all other afflicted by the virus, will be okay! Congress continues to negotiate a potential stimulus deal. ...
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3 Positive Indicators Amidst Nasty Market Sentiment

The market is in a bit of a tailspin again as concerns about a lack of progress on fiscal stimulus and the tumultuous election way down sentiment.  While it seems unlikely a new stimulus package will get put out before the election, I think it is very likely one of significant size will come within...
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Stocks Enter Correction Territory- Comparison to 2016

Equities have sold off quite hard over the last few weeks, starting with the mega-cap Technology names, some of which are down more than 20%, and filtering into the overall market.  Volatility was heightened further over the weekend with the sad news of the passing of long-time Supreme Court Justice icon Ruth Bader Ginsburg.  The...
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Isaac Newton South Sea Bubble

Few things are more frustrating in investing than when you feel like you are missing out on an opportunity, which often can occur in speculative bubbles, so I just wanted to share a fun one with you.  You see people making money engaging in an activity, which you might believe intrinsically to not make sense,...
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Interesting Development in Value vs Growth

I’ve talked a lot about how the current market environment has a lot of similarities to the Tech Bubble.  I just wanted to share an interesting chart I found.  September has been a pretty good month for value so far, as it has outperformed growth by over 5%.  Obviously that isn’t a big deal given...
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Positive Trends Starting to Become More Clear

I wanted to provide a bit of good news in relation to Covid-19.  The Sun Belt wave, which peaked in late July has seen a substantial decline over the last 45 days.  Hospitalizations, ICUs, deaths, and even cases, have dropped meaningfully.  Keep in mind that many deaths we see reported daily actually occurred weeks or...
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Patience and Perseverance, The Keys for Long-Term Value Investor

“So, ironically, if you’re a value investor, if you’re a contrarian investor, you can’t succeed unless you’re willing to look and feel like an idiot for a period of time, until the turn happens.  If you’re willing to look and feel like an idiot, you will average in gradually and, at the turn, you’ll have...
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The Tesla Bubble

I’ve written quite a few times about the Tech Bubble that currently exists in the U.S. stock market.  No stock better epitomizes this madness than Tesla.  Over the last 12 months, Tesla generated $24.578 billion in total revenue and generated EBIT (earnings before interest and taxes) of negative $69MM.  Tesla’s market capitalization is a staggering...
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What Does Value Out-performance Look Like?

There was a really great interview between TD Ameritrade and Rob Arnott, who is one of the most respected stock strategists in the field.  Keep in mind that the spread between growth and value has literally never been greater. While it is easy to look at the recent past and extrapolate that into the future,...
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Market Darling Valuations

Sometimes it is easy to look at what is working in the stock market and assume that it is the “safe and prudent” way to invest, because it is working.  Remember that investing is about buying securities at a discount to intrinsic value based on a fundamental analysis that suggests the securities should appreciate over...
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Stimulus Discussions and Economic Data Showing Improvement

As we get into mid-August, we are seeing some very positive data points.  Hospitalizations and ICU utilization for Covid-19 are plummeting fast, particularly in the sunbelt, where there was so much concern.  Tragically deaths lag and are likely at their peak right now, although this is a far lower peak than what we saw in...
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GDP and Key Things to Watch

I hope everyone is healthy and making the best of this summer in this tumultuous year.  Today we got U.S. 2nd quarter GDP data, which was down by roughly a third, which is something we haven’t seen since the 1940’s.  This is a lagging indicator and was expected as a result of the Covid-19 pandemic...
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Compelling Statistics on Value Investing’s Mean Reversion

Over the long-term, the best performing stock strategy has been owning the cheapest companies from a valuation perspective.  Enterprise/value/EBIT, divides the (market cap+debt-cash by pretax operating income.)  An EV/EBIT of 5, means that if you buy a business for $1 million dollars, you are generating a 20% pretax return, or $200K.  That sounds pretty good...
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