The good news is that the market’s valuation remains well below its pre-2008 levels. Barring any major negative news (e.g. an oil crisis), we expect to see a relatively flat market for the rest of 2018 as company fundamentals catch up to the gains of last year.
Accounting earnings may have rebounded from 2015 lows, but economic earnings—which reverse accounting distortions and account for the weighted average cost of capital (WACC)—remain in a persistent downturn.
Robo-advisors and Robo-Analysts are both important to enabling wealth management firms to cut costs without sacrificing quality of advice, but the importance of a Robo-Analyst to enhance the quality of investment advice shouldn’t be underestimated.
We think today’s market is the best in many years for value investors, the real value investors, that is. The real value investors analyze footnotes and balance sheets in addition to income statements.
Even with inflation running below target, the Fed chose to raise interest rates again. The Fed’s influence is overstated, but it’s still troubling that major policymakers are acting on such an outdated view of the economy.