Earnings season has begun with very positive results shown thus far from the big banks, albeit a small sample size. I’ll be posting a lot of commentary on the market and specific investments as these results continue to come in. While there is tremendous uncertainty in so many areas, it is important not to let fear drive your investments, but instead rely on logic and fundamental analysis. The reality is that we have an opportunity to buy quality bonds yielding between 7-12% yield to maturities. Very profitable companies are available at large discounts to tangible book value with 5% plus dividend yields. Tremendous real estate companies are paying dividends upwards of 8% with strong growth prospects, despite the elevated interest rate environment. While the market’s overall valuation is high, skewed by those concentrated glamourous Tech stocks dominating the market, there are huge pockets of value for those willing to go outside the box.
It’s interesting because higher rates have helped our insurance company investments such as AGO, AIG, Fairfax, Berkshire Hathaway, Radian, MTG and NMIH, which have posted very strong returns over the last 3 years, other financial stocks such as banks have lagged behind. This is despite very strong earnings and financial performance, which I believe shows the opportunity and disconnect between price and value. On that note, here is our latest research report on Citigroup, which you can find here: Citigroup 10-16-2023.docx
I’d also mentioned that we have started a weekly radio show, which is starting off in Arizona, but we hope to launch in other regions in the near future, which will be complemented by a podcast. I’m doing the show with my good friend and colleague Bruce Weinstein of Premier Southwest Planning Group. Bruce is an expert in the insurance, financial planning and estate planning industry, so we’ve worked together for a long time. If you have any needs or would just like to discuss your options on life insurance or estate planning, please don’t hesitate to give us a call and we can get you on the right track. We believe firmly in not trying to be a jack of all trades, but master of none, so we prefer to partner with other experts to give you the best of both worlds, while maintaining all applicable licenses ourselves too. I’ll be introducing other members of TTCM and our partners via the podcast, to attack other financial planning issues or questions you might have, beyond investment management. Here is a link to our first show: Podcast Player Archives – KTAR.com – The Truth About Money