The S&P is 26% Tech. Your Value Investing Strategy Needs to Change for Client Returns. Here’s How ...
Markets may continue to go up, but the risk this time is that the rise is concentrated in a few names.?The S&P Index was +27% in 2021. The 10 biggest stocks accounted for 28.5% of the composition and 26% is technology based. Historically tech has gotten ahead of itself, and corrections usually are painful. Now is the time to be prudent and look at single stock investments with catalyst events that are uncorrelated to the wider market.?
Our firm has been providing clients with fully actionable researched stock situations for over 15 years that move price to value a lot faster than pure value investing, which still seems to be dead in the water. What is interesting about the catalyst event driven space is that it is under covered, uncorrelated and historically very profitable. Spinoffs, restructurings, management change and insiders buying their own shares are key areas of the market we analyze but traditionally have been too labor intensive for the money manager. We do all the work. Go figure. Having 20-30% of your portfolio exposed in this area is a trait I see with 100s of successful managers.
If you want to give your clients a different perspective and expose them to a value creating space where they will almost certainly never see otherwise, drop me an email and I'll arrange a call to give you the latest ideas. You'll be sorry you didn't. ;-)
Thank you -Jim