May 17, 20170Comments

Crossing the Chasm 2.0: Rise of the Robo-Analyst

In the same way online trading disrupted the distribution of investment advice, big-data analytics and machine learning will disrupt how financial advice and the research behind it is created.

by Sam McBride

May 4, 20172Comments

The Earnings Recovery Is A Sham

Our analysis of the latest 10-K filings for the 2,600 largest and most actively-traded companies shows that the much-hyped end to the earnings recession is an accounting illusion.

by Sam McBride

April 3, 20170Comments

Diligence Will Matter More Than Ever In 2017

Uncertainty defined 2016. In the midst of all the uncertainty, investors grew more and more aware of the need for real diligence. Market conditions, changing investor behavior, and new technologies all come together to make diligent research matter more than ever.

by Sam McBride

March 15, 20170Comments

Fed Watching Can Be A Costly Distraction

Investors agonizing over the Fed should focus their efforts elsewhere. Instead of guessing where interest rates will go, read some of the thousands of annual 10-K reports that have come out in the past month.

by Sam McBride

December 16, 20160Comments

2016 In Review, Looking Ahead to Next Year

As 2016 comes to an end, we’d like to highlight some of New Constructs’ many accomplishments for this year. We’ve helped our partners and clients avoid stock blow-ups, find long ideas that soar and leverage Model Portfolios that outperform across the board.

by Kyle Guske II, Senior Investment Analyst, MBA

December 14, 20160Comments

The Fed Is Chasing Trump’s Tail

As we’ve argued in the past, the Fed is irrelevant. The market has already driven interest rates up in response to Trump’s election and a more positive economic outlook.

by Sam McBride

November 3, 20160Comments

The Low Rate Era: Why The Fed’s Decision Is No Surprise

The Fed needs to acknowledge that it’s no longer in the driver’s seat and stop with the vague hints about “normalizing” monetary policy. Low interest rates are the new normal, and there’s nothing the Fed can do about that fact.

by Sam McBride

October 7, 20160Comments

How Clinton And Trump’s Fiscal Policy Will Impact The Economy

Much has been made of the candidates’ sharp differences, but there’s one area where they have put forward remarkably similar plans. Both candidates agree: repatriate offshore cash, invest in infrastructure

by Sam McBride

October 5, 20161Comments

Ignore Clinton And Trump: The Fed Is A Sideshow

Endlessly debating the actions of the Fed, either by political candidates or financial talking heads, has become a sideshow that distracts from the real workings of the economy and the stock market.

by Sam McBride

September 26, 20162Comments

The Fed Is Irrelevant: Low Interest Rates Are the New Normal

It’s time to consider a new paradigm for interest rates – a paradigm where treasury rates remain ultra low and riskier investments are priced by a decentralized market instead of a central bank.

by Sam McBride

September 23, 20164Comments

What’s The Problem With Non-GAAP Earnings?

Non-GAAP earnings are back in the crosshairs. 15 years after the Enron scandal first prompted the SEC to create rules for non-GAAP metrics, the proliferation of these pro forma results have led to renewed scrutiny.

by Sam McBride

September 22, 20163Comments

How The Internet Economy Killed Inflation

The internet economy may be in the early stages of transforming our daily lives, but it’s already wreaking havoc on economic policy. As mentioned at the top of this piece, the Fed cannot manage to hit its 2% inflation target no matter how hard it tries, so maybe it should stop trying.

by Sam McBride

August 12, 20161Comments

Are Utilities In A Bubble?

Could these traditionally safe stocks be dangerously overvalued and setting up for a crash? And if so, how should investors manage their portfolios to mitigate this risk?

by Sam McBride

May 3, 20160Comments

Identifying Good And Bad Activist Investors

There are some genuinely good examples of shareholder activism out there. In the right context, activist investors hold management accountable and play a beneficial role in the market by ensuring that poor corporate governance and strategy don’t persist.

by Sam McBride

April 28, 20160Comments

The SEC Is Starting To Worry About Non-GAAP Earnings

We’ve been sounding the alarm on non-GAAP earnings for several years now. Companies exploited the wide leeway granted by the SEC to present their business in a more favorable light.

by Sam McBride

March 22, 20160Comments

The Value Of Transparency: Why Methodology Matters

investors always need to dig deeper than looking at a simple “buy” or “sell”. Sometimes, these ratings can be driven by factors that have nothing to do with markets or fundamentals. On other occasions, the argument might sound convincing but completely crumble when you examine some of the underlying assumptions.

by Sam McBride

February 24, 20160Comments

How EV/EBITDA Misses The Point On Valuation

In reality, EV/EBITDA can actually be significantly worse than P/E or P/B ratios because EBITDA ignores certain real costs of doing business like taxes, depreciation, and amortization. Put simply, EBITDA is even farther removed from the real cash flows of the business than EPS or net income.

by Kyle Guske II, Senior Investment Analyst, MBA

February 23, 20161Comments

Why Investors Need Independent Research

Some of the best research in the world comes from Wall Street. It has long been a leader in providing investors with ideas and strategies for investing. At the same time, it is important not to paint all Wall Street research with the same brush. Not all of Wall Street is the same, and some of the research it produces poses certain risks.

by Kyle Guske II, Senior Investment Analyst, MBA

February 16, 20160Comments

Market Outlook For 2016

I think we are seeing the start of that process in late 2015 and early 2016. The combination of a slowdown in China, falling energy prices, and the end of zero interest rate policy from the Fed have put markets and the global economy in an interesting state of transition.

by Sam McBride

February 16, 20163Comments

How Buybacks Destroy Shareholder Value

Corporate America has the resources to deploy a large amount of capital and invest in new technologies and innovations that can drive growth. Instead, they just keep spending more and more money on buybacks.

by Sam McBride

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