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The Momentum Reversal: A Cautionary Tale

August 25, 2021

Historically, High momentum stocks have done quite well, with the top quintile outperforming the bottom in many years. In 2020, the High momentum group did significantly well in the early part of the year, while that trend reversed in the second half and into 2021. YTD, we’ve seen the largest reversal in the momentum factor since 2016, with High momentum companies underperforming Low firms by over 15%. […more]

Valuations in the Energy & Utility Sectors

June 2, 2021

Looking at the most recent aggregate Valuation data, both the Russell 1000 and Russell 2000 look expensive relative to their long-term levels. On a sector basis, large and small cap Energy stocks, and large cap Utility stocks all seem attractive, while small cap Utilities appear expensive. […more]

Tactical Valuation Update – May 2021

May 11, 2021

Applied Finance will continue to monitor and report aggregate market valuation characteristics to help our research partners allocate capital in the current US equity landscape.  This update reflects aggregate valuation characteristics based on 4/30/21 closing […more]

Navigating the Current Equity Landscape

May 7, 2021

Navigating the Current Equity Landscape with an Emphasis on High Profits and High Growth Reopening and inflationary themes conjure many competing narratives on the proper way to build portfolios or allocate capital in preparation for […more]

2021: The Year of Rebalancing

April 14, 2021

In just 12 short months, $8.3T flooded into the US Economy and the country is spending much more than current tax revenues allow. The bill will come due, and it will begin to come due soon. 2022 now appears to be the most likely start for tighter policies. […more]

The Roaring 2020’s

December 11, 2020

The 1999 Tech Bubble was an extraordinary period. “Fundamentals don’t matter” “It’s a tech company, not a manufacturer” “Past a certain point of profitability, there’s zero chance the call options tank back to worthless” However, […more]

The Dangers of High Expectations

November 19, 2020

Investors need to understand the expectations that are built into their investments. When large scale events such as the Covid-19 pandemic occur, investors reprice equities based on new information. Expectations can often exceed reality though. […more]

Investment Style Twaddle

November 11, 2020

Legendary investor Charlie Munger once said “The whole concept of dividing [indices] up into ‘value’ and ‘growth’ strikes me as twaddle. It’s convenient for a bunch of pension fund consultants to get fees prattling about […more]

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