The Active Management Channel

Where Might Credit Risks Exist? Follow the Supply

In 2017, corporate credit, including high yield, saw a resurgence in interest within a longer-term trend of increasing supply. In recent weeks, however, it has shown some cracks.

The Risk of Taking Risks

In the concluding piece of our three-part series on principles of the low-return imperative, we discuss why we believe investors can no longer take on risks they don't expect to get paid for—and identify two key risks we see as unrewarded.

Green Grass and High Tides: Earnings Stellar But Not Without Risk

The book is closing on third quarter earnings, which were stellar; but is it time to worry about a bar set too high in 2018?

Weighing the Week Ahead: Will Black Friday Lead to a Green Market?

The economic calendar includes few reports, crammed into two days of a holiday-shortened week. Many will be taking time off – including some of the “A List” pundits. I expect to see some new faces on financial television and a lot of discussion about consumers and the economy. Many will be asking: What does Black Friday mean for the economy, and for stocks?

World Markets Update

All eight indexes on our world watch list have posted gains for 2017 through November 20. The top performer thus far is Hong Kong's Hang Seng with a gain of 33.0%, followed by India's BSE SENSEX at 25.43%. In third is Tokyo's Nikkei with 16.47%.

Neil Hennessy – The Opportunities in Mid-Cap and Japanese Stocks

Neil Hennessy is a portfolio manager and chief investment officer at Hennessy Funds. In this interview, he discusses the compelling opportunities in mid-cap and Japanese stocks, and what RIAs should be doing in advance of the next market correction.

Investing Like the Mafia 2017

As famed market strategist Richard Bernstein has pointed out, investors should pattern common stock selection after the investment style of the Mafia. What causes the Mafia to get such good returns? How do they spot opportunities? Why should we as investors in publicly-traded common stocks emulate their behavior near the end of 2017?

On My Radar: A Fatal Attraction for the Slim Chance

My daughter, Brianna, and I were recently listening to a Charlie Rose interview on Bloomberg Radio. I love the way he asks direct questions. The interview featured Jeremiah Tower, a little-known chef who pioneered a restaurant revolution in the 1970s that gave rise to the culinary style known as “California Cuisine.”

How do you measure an active manager’s success?

Financial research and technology can dissect individual funds to attribute the reasons behind performance.

Still Laboring

The trend is global: most countries are experiencing a relative increase in workforce participation among older workers.

Synchronized Global Growth May Have Arrived

Nearly 10 years after the financial crisis brought the global economy to its knees, conditions have finally improved enough to crystallize my conviction that synchronized global growth is currently underway. Revenue and earnings growth are up year-over-year, not just in the U.S. but worldwide. Despite President Donald Trump threatening to raise tariffs and tear up trade deals, global trade is accelerating. World manufacturing activity expanded to a 78-month high of 53.5 in October, with faster rates recorded in new orders, exports, employment and input prices.

Bonfire of the Absurdities

This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.

The Importance of Implementation Efficiency

In the second of a three-part series on principles of the low-return imperative, we zero in on the value of efficient implementation—and identify three ways it may help achieve desired outcomes.

Fund Managers Get Bullish

Global equities have risen 18% so far in 2017 and yet, until this month, fund managers have held significant amounts of cash and been, at best, only modestly bullish on equities. All of this has suggested lingering risk aversion. That has now changed.

Muni Investors: It’s Time to Quit Smoking Tobacco (Bonds)

Cigarettes come with warning labels. Tobacco bonds should, too. These securities are highly volatile, and at current prices they have nowhere to go but down. There are healthier alternatives in the high-yield municipal bond market.