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Nearly all major stock and bond indexes produced positive results during 2020 as markets recovered from the steep sell-off that resulted from the spread of the coronavirus. Extraordinary fiscal and monetary support from global governments and central banks helped spur the rebound, although the pandemic continued to pose significant public health and economic challenges as the year came to an end.
In the U.S., the large-cap Dow Jones Industrial Average and S&P 500 Index reached record highs, as did the technology-heavy Nasdaq Composite Index—a result that few would have predicted in late March after the benchmarks tumbled more
The firm curbed its position in Rollins Inc. (ROL) by 33.33%. The trade had an impact of -0.25% on the portfolio.
The company, which provides pest and termite control services, has a market cap of $18.46 billion and an enterprise value of $18.75 billion.
GuruFocus gives the company a profitability rating of 9 out of 10. The return on equity of 29.96% and return on assets
The market's resiliency through a year of both heightened economic and political uncertainty has been remarkable. Investors should be selective and employ active management to navigate the current environment.
The year 2020 was defined by the global pandemic, whose effects remain very much still with us and which will remain a challenge in all likelihood well into 2021. While the attention of the world has been appropriately devoted to the various stresses caused by COVID-19, what is remarkable is the market's incredible resiliency through a year of both heightened economic and political uncertainty.
Early in the year,
Please provide your perspective on financials in the current environment and why you are optimistic:
For the full year 2020, the S&P Financials Index declined -2%, and the KBW Bank Index fell even further at -10%; both underperformed the broader market indices. As disappointing as the first half of the year was for investors in financial companies, in the back half of the year financial stocks have clawed back much of that poor performance, with the S&P Financials Index returning +29% and the KBW Bank Index +34%, while the broader S&P 500 Index was up +22%.
The strong recovery (albeit
January 18, 2021
Dear Fellow Shareholder,
During the fourth quarter of 2020, the MSCI World Index gained 13.96%; the Polaris Global Value Fund ("the Fund") substantially outperformed, up 26.18%. This is the third consecutive quarter of absolute positive performance following poor first quarter results, in a year marked by a global pandemic, ensuing country lockdowns and political tumult. By the end of the year, stock markets were fueled by a number of positive developments: two highly-effective COVID- 19 vaccines, continued aggressive government stimulus, record low interest rates and the conclusion of the U.S. Presidential race.
In a quarter when
While bank stocks can hardly be said to have had a bad year in 2020, they did lag much of the rest of the market. However, they ended the year strong thanks in no small part to the Federal Reserve. On Dec. 18, the central bank announced the banking sector's clean bill of financial health following the latest round of stress tests.
The Fed has given banks the green light to loosen up from their defensive crouch. Consequently, bank stocks may be poised to enjoy a strong first quarter.
Buybacks back on the menu
The Dow Jones Industrial Average closed at 30,814.26 on Friday with a loss of 177.26 points or -0.57%. The S&P 500 closed at 3,768.25 for a loss of 27.29 points or -0.72%. The Nasdaq Composite closed at 12,998.50 for a loss of 114.14 points or -0.87%. The VIX Volatility Index was higher at 24.34 for a gain of 1.09 points or 4.69%.
For the week, the Nasdaq and S&P 500 were down around 1.5%. The Dow Jones had a loss of -0.90%. For the year, the S&P 500 has a gain of 0.3%, the Nasdaq has a gain of approximately
Shares of JPMorgan Chase & Co. (JPM) slipped approximately 2% on Friday following the release of its fourth-quarter 2020 earnings results.
For the quarter, the New York-based bank reported net income of $12.14 billion, or $3.79 in earnings per share, compared with net income of $8.52 billion, or $2.57 in earnings per share, for the fourth quarter of 2019.
Bank reports strong revenues even after excluding net reserve releases
JPMorgan Chase Chairman and CEO Jamie Dimon said that the bank concluded a "challenging" year with record revenues driven by the bank's "diversified
The Dow Jones Industrial Average closed at 30,991.52 on Thursday with a loss of 68.95 points or -0.22%. The S&P 500 closed at 3,795.54 for a loss of 14.30 points or -0.38%. The Nasdaq Composite closed at 13,112.64 for a loss of 16.31 points or -0.12%. The VIX Volatility Index was higher at 23.28 for a gain of 1.07 points or 4.82%.
Thursday's market movers
The major U.S. indexes ended with losses on Thursday. Joe Biden is scheduled to discuss his detailed plans for more Covid-19 stimulus on Thursday evening. Reports suggest that the plan will include $1,400 more in
The fourth-quarter 2020 earnings season will officially start this coming Friday with a few major banks set to report. Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and PNC Financial Services Group Inc. (PNC) will all report earnings before the opening bell on Jan. 14, and the expectations have consistently gone up for the financial services industry as the U.S. economy gained steam in the second half of 2020. There are many promising signs, but investors need to remain cautious and be selective when shopping for bargains.
Revenue growth is finally set to turn positive
One of the lessons of 2020 was the uselessness of the annual New Year's ritual of market forecasting. A pandemic was in no one's forecast, nor was the worst economic contraction and the highest unemployment rate since the Great Depression. This lesson was not new; we are taught it every year, yet we persist in making forecasts anyway – just another bad habit that is endemic in folks who make their living in capital markets. Ken Arrow, one of greatest economists of the last (and part of this) century, liked to tell the story of his time as a weather
In January 2018, Berkshire Hathaway (BRK.A)(BRK.B), Amazon.com Inc. (AMZN) and JPMorgan Chase & Co. (JPM) announced the formation of a new not-for-profit joint venture aimed at disrupting the $3.5 trillion health care industry. Originally nameless, the joint venture was dubbed Haven in March 2019.
Despite debuting with great promise, Haven struggled to live up to the hype. On Jan. 4, the organization announced it will be shut down.
Dream team breaks up
Between Berkshire's unparalleled operational expertise, Amazon's record as a peerless industry disruptor and JPMorgan's status as a financial powerhouse, Haven began life with serious clout behind it.
In my opinion, investors may want to consider the three stocks that are listed in this article, since they could meet the following value criteria:
- These stocks do not seem expensive, as their price-earnings ratios are 20 or less
- Their earnings and revenue, both on a per share basis, have advanced over the past five years, while no losses had to be noted in the years in question
- These stocks have positive recommendation ratings from sell-side analysts on Wall Street.
JPMorgan Chase & Co
The first stock to consider is JPMorgan Chase & Co (JPM), a U.S.
Banks play an integral role in an economy by facilitating capital flows and overlooking payments. For this reason, the financial services sector is often considered as one of the most critical pillars to the success of a nation. The global financial crisis raised questions about the lending and investment practices of the global banking industry as several billion-dollar banks were bailed out by regulators to avoid a catastrophe. Following this event, the Federal Reserve introduced many precautionary measures to prevent adverse developments in the future, and the stress test results released by the Fed on Dec. 18 goes on to
The third quarter was undeniably another bull run for stock markets with the major U.S. indexes reaching unprecedented highs. The S&P 500 surpassed 3,500 for the first time in history, the Nasdaq rocketed above 11,000 and the Dow Jones Industrial Average came within a few hundred points of recovering from its pre-Covid highs.
As a result, the U.S. stock market is more overvalued than ever. The Buffett Indicator, which is the ratio of total market cap to gross domestic product, stands at 183.1% as of Dec. 7, indicating the U.S. stock market is significantly overvalued. This
On Nov. 17, Ray Dalio (Trades, Portfolio) took to Twitter to share his latest thoughts on bitcoin in light of its latest upward surge. While asserting that his opinion was open for change, provided he received sufficiently compelling counterarguments, Dalio made it clear that his skepticism of bitcoin, which is based in large part on the cryptocurrency's continued volatility, has yet to be assuaged.
Still too volatile for Dalio
According to Dalio, the wild swings in bitcoin's value make it unsuitable for use either as a medium of exchange or as
PayPal Inc. (PYPL) embraced the cryptocurrency market after rolling out trading services in the U.S last week. The online payments giant's recent activities have had a major impact on the cr.yptocurrency market, with the price of bitcoin surging closer to historical highs.
However, investors will also be taking note of the potential implications this could have on various aspects of investing. The company's stock has gained more than 5% over the last five days, which could be partly attributed to the cryptocurrency news.
The implication on taxes
PayPal has placed a ceiling
Third-quarter 13-F filings of major investment management companies have been hitting the market over the last couple of weeks.
Investors monitor these regulatory filings not only to find lucrative investment ideas that are loved by gurus but also to gauge a measure of market sectors that are going out of favor among the best brains in the industry.
From my analysis of the recently-submitted documents that I have read, many gurus have divested large portions of their holdings in the financial services sector during the third quarter. The notable guru sells that I want to highlight are listed below:
Stanley Druckenmiller (Trades, Portfolio), CEO and Chairman of Duquesne Capital, has revealed his portfolio for the third quarter. Major changes include cutting the holdings in JPMorgan Chase & Co. (JPM), PayPal Holdings Inc. (PYPL) and Workday Inc. (WDAY) significantly.
Druckenmiller worked for George Soros (Trades, Portfolio) from 1988 to 2000 as the lead portfolio manager for the Quantum Fund. He founded Duquesne Capital in 1981 and it operated as a hedge fund until 2010, but now operates as a family office. Druckenmiller takes a macroeconomic approach to investing.
Leon Cooperman (Trades, Portfolio), founder and chairman of the Omega Advisors Family Office, disclosed that its top five trades for the third quarter included new holdings in Alphabet Inc. (GOOG)(GOOGL) and Athene Holding Ltd. (ATH) and sells in JPMorgan Chase & Co. (JPM), Centene Corp. (CNC) and Cigna Corp. (CI).
The chairman of the New York-based firm combines his macro views and fundamental valuation in his investing strategy. Cooperman converted his hedge fund into a family office in 2018, citing in a letter that he did not wish to chase the Standard & Poor's 500 Index for