Things are pretty wild right now. Stocks are in a bear market and we’re pretty clearly in a recession. As of mid-June 2022: The S&P is in bear market territory, down 20.5% YTD The Nasdaq is down almost 32% Crypto is being decimated (Bitcoin is down more than 55%, Ethereum is off over 70%) Headline inflation has been over 8% for 3 months straight, with gas prices over $5 nationally GDP growth was negative in Q1 in the USA and Q2 will likely also be negative (aka, a recession) Tech companies (and others) are freezing hiring and/or laying people off A lot of people are experiencing this kin ..read more

Most value investors would not consider options and options trading as part of their investing strategy, but here’s where and how options can fit in. Options Trading: Really!? Derivatives, futures, FX trading, margin, options, and who knows what else? All of these terms we have maybe seen before on our brokerage website or somewhere on the Internet. They all sound scary, complicated, and speculative. Another word that might come to mind is “gambling.” Whatever “options” are, they’re absolutely -NOT- value investing. They shouldn’t even be in the same sentence. Right? Hear me out As a value inv ..read more

Written by Mark Roussin Big Ticket Fund Managers Follow on Twitter Today we are living in uncertain times and with uncertainty brings volatile stock markets. The COVID-19 virus that has overtaken the globe and sent countries into pure panic mode. Over the course of the past four weeks or so, this panic has sent the S&P 500 from a high of $3,393 down to a low of $2,192, a decrease of 35%. During times of panic we tend to see increased volume levels, which is exactly the case since late February as volume levels nearly tripled. The majority has been panic selling as many of us do not know ..read more

Written by Mark Roussin Big Ticket Fund Managers Follow on Twitter Over the past few months, we have received numerous requests from some of our newer investors on how to start a dividend growth portfolio. In this piece, I will take you through the ins and outs of starting a dividend growth portfolio and why it is a highly rewarding approach. Starting a dividend growth portfolio could be your ticket to financial freedom. I started investing in my early 30s with little to no experience or guidance. Like some of you, I took the long road by learning on my own through reading online articles an ..read more

I recently finished reading “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution,” by Gregory Zuckerman. It’s the most detailed public look at how Renaissance Technologies became the most successful hedge fund in history. (Yes, they blow Bridgewater and everyone else out of the water.) Renaissance’s flagship Medallion fund, which is run mostly for fund employees, is famed for the best track record on Wall Street, returning more than 66 percent annualized before fees and 39 percent after fees over a 30-year span from 1988 to 2018. Wikipedia As a publicity-averse f ..read more

As we head into the holidays, this will be the last nugget fest of the year. I hope you get to enjoy some time off for family and reflection. I know I will! Best, Mike Gurus Introduction to the Essays of Warren Buffett: Lessons for Corporate America by Lawrence A. Cunningham [SSRN] This is Professor Cunningham’s Introduction to his book on Buffett’s shareholder letters. If you haven’t read the book, or even if you have, the introduction is a good read (or re-read), as it’s largely his synthesis of all those letters. Howard Marks: “I don’t see that we’re in a bubble.” [CNBC] A 6-minute intervie ..read more

Hope you’re enjoying the start to winter so far. On the blog, we published a piece we worked on with one of our readers, Ney Torres, asking whether negative equity is bad. Depending on how much time you have, I highly recommend the piece by Aswath Damodaran and the interview with Vitaliy Katsenelson this week. Enjoy! Mike Gurus An In-Depth Breakdown of Warren Buffett’s Portfolio [The Motley Fool] Interesting breakdown of BRK’s portfolio by industry, with each of the names listed. Hint: lots of financials. Charles Schwab just broke one of Warren Buffett’s biggest rules about acquisitions [CNBC ..read more

This is a guest post from Ney Torres, with whom I had an interesting email exchange as we tried to figure out why Home Depot had negative equity. Is negative equity bad? Most of the time, yes! But not always. In fact, having negative equity can be a sign of an excellent company. It took me a while to understand this because it is not obvious. Let me walk you through what I’ve come to learn. What Negative Equity Usually Means Negative equity, most of the time, means that a company’s liabilities are so high that (in theory) shareholders owe money to their lenders. A clear example of this happens ..read more

This is a guest post from Ney Torres, with whom I had an interesting email exchange as we tried to figure out why Home Depot had negative equity. Is negative equity bad? Most of the time, yes! But not always. In fact, having negative equity can be a sign of an excellent company. It took me a while to understand this because it is not obvious. Let me walk you through what I’ve come to learn. What Negative Equity Usually Means Negative equity, most of the time, means that a company’s liabilities are so high that (in theory) shareholders owe money to their lenders. A clear example of this happens ..read more

In addition to the links below, we partnered with Sure Dividend to bring you a post about selecting the best dividend growth stocks. If you care about dividend content, check them out. We’ll take a break from the newsletter next week. For all those in the U.S., happy Thanksgiving! Enjoy! Mike Gurus Warren Buffett: If You Have To Closely Follow A Company, You Shouldn’t Own It – Stock Screener [The Acquirer’s Multiple® ] “If you buy a business. If you buy a farm, do you go up and look every couple of weeks to see how far the corn is up? Do you worry too much about whether somebody says this is g ..read more