October 15, 2021: In this article, we’ll discuss the housing market – the causes of the price boom, how sustainable they are, and how this compared to the mid-2000’s bubble. Why have home prices gone up so much? In the 12 months leading to July 2021, single family home prices increased by 20% …
A generational opportunity in value vs. growth
August 10, 2021: Back in late January, we argued that US growth stocks had become a full-scale bubble. Since then, some of the high-flying investments we wrote about have done quite poorly. Tesla and Gamestop both peaked within days of our article; they are down 21% and 56% respectively. An …
If there’s a bubble, why not go to cash?
March 4, 2021: We’ve gotten this question a few times: a bursting bubble in US growth stocks will likely drag everything down for a while; why not just sell out and wait for this to unfold? It’s a reasonable question, and we would love to be able to avoid a downturn if we thought it could …
US growth bubble part 2: how we’re investing
March 4, 2021: In our last article, we made the case for a major speculative bubble in US growth stocks . Below we’ll discuss how we are investing in this situation, starting with a look back at the last two major bubbles. The tech bubble – safety in value The US stock market declined by …
A major bubble in growth stocks
January 28, 2021: Stock markets have been surging higher, and our favored areas (international and emerging value stocks) really outperformed last quarter. But looking at the whole of 2020, the real craziness took place in growth stocks. In fact, we believe that US growth stocks have become a …
The investment impact of the election
October 29, 2020 We’ve been getting a lot of questions about the election and its potential impact on the stock market, so we wanted to write some thoughts on the topic. To begin with, we should mention that we have very low exposure to US stocks. This has nothing to do with the election, and …
From fear to greed in four months
July 24, 2020 The world continues to grapple with the Covid-19 pandemic, but you wouldn’t know it by looking at financial markets. The recent cheerful market mood is a huge turnaround from the complete panic and despair that reigned just four months ago.During the panic, we were adding to our stock …
Feelings vs. reason: what’s in control?
May 25, 2020 Excerpted from a letter to clients sent on May 14, 2020. Anyone can sign up for our quarterly updates here. “When it comes time to buy, you won’t want to.” Doug Kass In mid-March, it was pretty clear to all that COVID-19 was going to be a disaster for many people …
Stock prices, values, and return forecasts (better than 2009, in some cases)
April 3, 2020 In our last letter, we explained why we think the pandemic seems unlikely to significantly alter the stock market’s fair value. To very briefly recap: Stocks represent ownership of a long-term stream of future earnings. The “fair value” of the stock market is the …
A bad economy doesn’t make stocks a bad investment (plus: government/Fed stimulus update)
March 26, 2020 Excerpted from a letter to clients sent on March 26, 2020. Anyone can sign up for our quarterly updates here. We hope you are staying healthy and safe. We have thoughts to share on several topics, but in the interest of not overwhelming you, we’ll break it up into a few …