Just One Word – Margins
January 9, 2019
Margins drove outstanding earnings growth in 2018, and can choke it off in 2019. It may seem as if this correction is a bit overdone. But there is a major issue. Margins are at record highs and forecast to recede.
A Ferengi’s Equity Allocation
July 4, 2018
Star Trek’s Ferengi are a species whose culture is entirely based on commerce. Business is pleasure and money is everything. So how would a Ferengi invest in Earth’s stock market? What would their Blue Planet Portfolio look like?
Manager’s Letter 2018 Q1
April 4, 2018
While no investor who’s long the market enjoys a correction, negotiated properly, it can be turned to an advantage. At Coherent, we focus on proactively mitigating downside risks by actively managing our stock market exposure.
Manager’s Letter 2017 Q4
January 5, 2018
In the current stock market, irresistible forces for economic growth face seemingly insurmountable stock market barriers. GDP is finally spearheading economic growth. However, record operating margins stand a formidable shield against earnings growth.
Manager’s Letter 2017 Q3
October 1, 2017
In the short-run, the market is a voting machine. Some risks have abated as others become the focus of the market’s voting mechanism. If the market climbs a wall of worry, I would worry about the wall growing shorter.
Manager’s Letter 2017 Q2
July 4, 2017
Sector rotation has accelerated to a whipsawing pace. Mismanaging sector allocations can severely affect your portfolio’s risk-adjusted performance. Is it time for sector rotation strategies? If you like jumping from one moving roller coaster onto another, then yes.
Manager’s Letter 2017 Q1
April 4, 2017
Like Shakespeare’s plays, markets are human nature on display. Expectations become extended with rallies as the best outcomes are priced-in. But in protracted corrections, hope ebbs as the worst outcomes are discounted. Today’s market is where “oft expectations fail”.
Manager’s Letter 2016 Q4
January 3, 2017
Winds of change have swept across the geopolitical landscape from 2016 and into the new year. How markets will be affected in 2017 and beyond will be the focus of much speculation. At Coherent, we would rather rely on tangible market factors more easily observable than wind.
Manager’s Letter 2016 Q3
October 5, 2016
Fifty years ago last month, NBC aired the first episode of Star Trek. In its preceding pilot, “The Cage”, the captain is held prisoner by aliens who have the power to project incredibly lifelike illusions. Concerning the financial markets, people readily create their own illusions without any assistance from aliens. At Coherent, we prefer sound reason over illusion.
Manager’s Letter 2016 Q2
July 5, 2016
Thomas Paine’s “Common Sense” spoke to the common American reasoning for independence from Great Britain. In an ironic turn, 240 years later, Britons voted for independence from the European Union just days before Americans celebrate their Independence Day.