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We are approximately eight months into a global pandemic that has infected an estimated 18 million people and taken almost 700,000 lives. Everyone is wrestling with the ripple through effects that COVID-19 has not only had on our personal lives, but also on the broader aspects of our economy, including science, politics, economics, education, mental health, food supply, and transportation. The 7.8 billion people on the planet, including investors, are waiting for a bridge to a COVID-19 vaccine cure to come as soon as possible, so people and the world can begin returning towards normalcy.
The bridge to
The current bull market may have only lasted for around four months, but many S&P 500 stocks now have extremely high valuations.
Therefore, investors buying stocks today may end up overpaying for companies that face uncertain trading conditions caused by a weak economic outlook.
In my view, following the advice of Oaktree Capital co-founder Howard Marks (Trades, Portfolio) could be a good idea. His willingness to go against the views of his peers and focus on company valuations may produce relatively high returns in the long run.
Overpaying for stocks
The recent updates from a number of
The Dow Jones Industrial Average closed at 26,664.40 on Monday with a gain of 236.08 points or 0.89%. The S&P 500 closed at 3,294.61for a gain of 23.49 points or 0.72%. The Nasdaq Composite closed at 10,902.80 for a gain of 157.52 points or 1.47%. The VIX Volatility Index was higher at 24.53 for a gain of 0.070 points or 0.29%.
Monday’s market movers
U.S. indexes closed higher Monday. Last week’s tech stocks earnings release rally fueled gains across the tech sector. FAANG stocks had the following returns for the day:
- Facebook (FB) -0.67%
- Amazon (AMZN) -1.67%
- Apple (AAPL)
To Our Shareholders
The Dodge & Cox Global Stock Fund had a total return of –17.0% for the first six months ended June 30, 2020, compared to a return of –5.8% for the MSCI World Index.
In the first quarter of 2020, the coronavirus (COVID-19) pandemic evolved into a global threat that disrupted major economies and greatly increased volatility in the financial markets. After declining sharply in the first quarter, the MSCI World rebounded strongly in the second quarter, with every sector and region posting positive returns. Not surprisingly, some of the hardest hit sectors in the first
Last week, Facebook Inc. (FB) reported results for the second quarter of fiscal 2020.
For the quarter, revenue increased 11% to $18.7 billion, another meaningful sequential deceleration (revenues were up 25% in the fourth quarter and up 18% in the first quarter). As noted on the call, this reflects the impact of decreases in advertising revenue as a result of the pandemic (most notably ad rates), offset by a meaningful increase in user engagement. Daily active users (DAUs) increased double digits in the quarter, with higher engagement across the company’s services as people around the world sheltered in place. As
On Friday, shares of Google parent Alphabet Inc. (GOOGL)(GOOG) bucked the trend on the back of reporting its first year-over-year revenue decline in history. Although shares of other Big Tech companies gained over 5%, both Class A and Class C shares of Google tumbled more than 3% for the day.
Company revenues decline as advertisers pull back spending
Google CEO Sundar Pichai said that although Cloud, Play and YouTube revenues remain strong as people increasingly return to online services and commercial activities, total revenues for the second quarter declined 2% year over year
The Dow Jones Industrial Average closed at 26,428.32 on Friday with a gain of 114.67 points or 0.44%. The S&P 500 closed at 3,271.12for a gain of 24.90 points or 0.77%. The Nasdaq Composite closed at 10,745.27 for a gain of 157.46 points or 1.49%. The VIX Volatility Index was lower at 24.09 for a loss of 0.67 points or -2.71%.
For the week, the Nasdaq gained 3.7%, the S&P 500 gained 1.7% and the Dow Jones returned -0.2%. For the month, the Nasdaq was up 6.8%, the S&P 500 gained 5.5% and the Dow Jones gained 2.4%. For the
Real estate investment trusts (REITs) can provide investors with a great way to gain exposure to the property market. Not everyone has the money to buy real estate (and still fewer have the capital required to build a diversified portfolio), but anyone can buy shares in a REIT.
Furthermore, REITs allow investors to specialize in a particular sector, be it residential, commercial, healthcare, old age living, or any other niche. Of course, real estate has been a bit challenged over the last few months, as lockdowns have stymied much of the cash flow that some of these
It’s one thing to plan for a market crash but something else to live through a severe market decline and come out stronger than ever.
More often than not, investors lose hope during a bear market to the extent that they may even abandon equity market investments for a long period before getting back to markets exactly at the wrong time. Even though this phenomenon has happened throughout the last century, it seems as if investors are not learning from their mistakes and are hesitant to do the right thing when markets crash.
During these trying times, the best way
Shares of Facebook Inc. (FB), a major social media platform, soared over 6% in aftermarket trading despite reporting its slowest quarterly revenue growth since its 2012 initial public offering.
For the quarter ending June 30, the Menlo Park, California-based company reported net income of $5.178 billion, or $1.80 in diluted earnings per share, compared with net income of $2.616 billion, or 91 cents in diluted earnings per share, in the prior-year quarter. Revenues came in at $18.321 billion, outperforming the Refinitiv estimate of $17.4 billion but up just 10% from the prior-year quarter revenue of $16.624 billion.
The U.S. economy entered 2020 with high hopes of delivering stellar growth, only to find itself in the deepest recession in recent memory within just a couple of months. The second-quarter economic performance of the country will make history, but for all the wrong reasons. The U.S. Bureau of Economic Analysis revealed that real gross domestic product has decreased a staggering 32.9% in the three months ended June 30.
Source: U.S. Bureau of Economic Analysis
Commenting on the reasons behind this sharp decline, the bureau wrote in its quarterly statement:
“The decrease in real GDP
The Partners III Opportunity Fund’s Institutional Class returned +11.42% in the second quarter, compared to +20.54% for the S&P 500 (the Fund’s primary benchmark) and +22.03% for the Russell 3000. For the calendar year to date, the Fund’s Institutional Class returned -6.59% compared to -3.08% for the S&P 500 and -3.48% for the Russell 3000.
The stock market came roaring back in the second quarter, recovering much of the prior quarter’s losses. High-quality companies with long growth runways once again led the market’s charge and were our top performers as well. Within our portfolio, these strong performers included technology
According to the GuruFocus Baskets feature, major technology companies Facebook Inc. (FB) and Apple Inc. (AAPL) are among the most-voted stocks in the “Considering” Basket as of Wednesday despite their CEOs testifying in front of the U.S. House Judiciary Committee on antitrust issues.
New feature recap
According to the feature announcement, GuruFocus users can assign a stock into one of four virtual “baskets” based on Berkshire Hathaway Inc. (BRK.A)(BRK.B) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s theories of achieving higher returns by investing only within one’s “circle
“What you need to do is operate your company in such way, knowing That you will be weighted one day. Never spend any time thinking about the daily stock price. I never do.” –Jeff Bezos
July 22, 2020
The Boyar Value Group (like most companies) continues to work remotely. Our investment in technology is paying dividends, as we were able to seamlessly transition to a remote environment, and it is business as usual. Our group is in constant contact, and our analyst team is working diligently to uncover value on behalf of our clients. We hope to
The growth vs. value debate is heating up once again as investors try to determine the best strategy to navigate the current economic crisis.
The challenging macro-economic conditions are revealing flaws in both these strategies. For instance, a few companies that were considered to be safe and sound investments for value investors, notably the leading banks in the U.S., are reeling from the recession, and the sector performance has lagged the broad market by a considerable margin. On the other hand, some high-growth companies are finding it difficult to remain solvent as the policy of using massive cash burn and
On Monday, PepsiCo (PEP) reported its financial results for the second quarter of fiscal 2020.
For the quarter, organic revenues declined marginally, with a 5% increase in the company’s snacks business due to overall category growth and market share gains offset by a 7% decline in the beverages business due to headwinds in convenience stores (C-stores) and other high-margin away-from-home channels (most notably foodservice). This decline followed a strong result in the first quarter (organic revenues +8%), with year to date organic revenues at PepsiCo up 3%.
Growth in the quarter and through the first half of the fiscal
Facebook (FB) shares rebounded as the market discounted the scenario that the worst of the COVID-19 driven advertising slowdown is behind us. While the Company reported +17% revenue growth for the period ending March 31, management mentioned that revenue growth was about flat during the worst of the shutdowns in April. However, Facebook saw an astounding +70% increase in time spent on its properties as stay at home orders went into effect across the globe. After adding to shares during the first quarter, Facebook shares appreciated to more than 10% position size in portfolios, so we trimmed the position
As the market continues to grapple with the effects of the coronavirus pandemic, some investors are seeing strength among U.S. small-cap stocks.
In an interview with CNBC’s “Squawk Box Europe” on Friday, Nick Ford, who manages the U.S. Opportunities Fund for London-based Premier Miton Investors, said a handful of American small and mid-cap companies are “thriving” under the Covid-19 lockdown and will likely continue to do so as investors pursue greater “earnings visibility.”
He also pointed out that small-cap stocks, which typically have a market capitalization between $300 million and $2 billion, broadly tend to either outperform or underperform the
The second quarter of 2020 was an almost mirror image of the first. The world’s efforts to curb the spread of the coronavirus began to have an impact and the significant U.S. fiscal stimulus, announced in late March, provided much-needed support to consumers, businesses, and the credit markets. The Oakmark Select Fund returned 23% in the second quarter versus a 21% return for the S&P 500 Index. While we are gratified by this result, we understand that we have significant ground to make up with the Fund down approximately 17% YTD (in line with the Russell 1000 Value Index, also
The S&P 500 Index staged a comeback during the second quarter after falling by 20 percentage points during the first three months of the year. The rebound was driven by increased optimism regarding the pace and shape of the economic recovery as shelter-in-place restrictions eased throughout many parts of the country and most businesses were allowed to reopen in some capacity. The Oakmark Fund performed well during this period on both an absolute and relative basis. For the quarter, the Fund appreciated by 23%, outperforming the S&P 500’s return of 21%. We remained active during the second quarter as we