Has value investing died in this new normal as the fundamentals meltdown and risk asset prices melt-up where all that counts is the central bank’s willingness to keep stocks propped up with massive amounts of liquidity. Not even a deep earnings recession, a coronavirus-induced collapse in profits where earnings have been tipped to fall by 60% in the quarter has dampened the recent bull run in stocks. So the financially...
Read MoreA deep earnings recession made worse by a coronavirus-induced collapse in profits could be the final straw that dashes all hopes of a swift V-shaped recovery. Before the coronavirus hit the mainstream corporates were already in an earnings recession. In a piece entitled, “Earnings Recession” dated November 2019, I wrote, “the overall three straight quarters of year-over-year earnings declines suggest that companies are deep into an...
Read MoreThe transition to a new monetary policy regime, known as MP3 state capitalism is in play according to Bridgewater’s CIO Prince. MP3 state capitalism puts the government at the epicenter of capital distribution and it is likely to have a profound impact on investment portfolios going forward. So how did we get to MP3 state capitalism, which is likely to be radically different from previous cycles? The idea of state capitalism...
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