GLOBALT Investments’ Post

Another look at how passive flows have helped to propel the largest market capitalized companies, even further. Concurrently, S&P showed that dispersion continues to rise and correlation within the SPY lower on the year now. Will be interesting to look back a year from now if passive flows pay attention to more individual opportunities via higher dispersion....or if the trend marches on regardless of active managers finding opportunities outside the index weights:

The Morningstar US Broad Style Wide Moat Focus Indexes target stocks with Wide Moat ratings and attractive valuations while leveraging the same metrics as the flagship Morningstar Style Box to maintain style consistency. Learn more about the potential benefits of this approach: http://spr.ly/6042wfIwy #MorningstarIndexes

The Morningstar US Broad Style Wide Moat Focus Indexes target stocks with Wide Moat ratings and attractive valuations while leveraging the same metrics as the flagship Morningstar Style Box to maintain style consistency. Learn more about the potential benefits of this approach: http://spr.ly/6042wfIwy #MorningstarIndexes

#WisdomWednesdays In today's complex environment, each of the major large cap style boxes present distortions and challenges due to the “unmanaged” capital allocation process of the indices. Many wealth management professionals allocate equities based on a conventional “style box” framework with the intention to enable investors to participate in diverse areas of the market while achieving a degree of diversification across styles. Here are some of the key distortions of the indices that for many serve as proxies for these different styles (as of 5/30/24): S&P 500 Growth Index (Growth): Trading at over 29x forward earnings and with 62% of assets in just two sectors, we believe the concentration and value risk are material S&P 500 Index (Core): The top 10 positions constitute 34% of the whole, while the other 490+ stocks have an average weighting of 0.2%, which is a sub-optimal spreading around of capital in our view. S&P 500 Value Index (Value): Less than 8.0% of its assets are in tech which may put it at a structural disadvantage versus relative value/GARP, core, and growth should technology’s leadership in the markets persist. We believe that the solution to distortions within benchmarks – which can persist for long stretches of time – is to implement true active management portfolios relying on deep, independent research and disciplined stock selection.  #valueinvesting #investing #markets

In FY24, I received more dividend than my portfolio in 2004-05. It means in 19 years time, I am getting back original investment every year through dividend itself. Compounding at a CAGR of 25-26% for 18-19 years would result into 100X portfolio. It is a very tough task, but if applied with enormous research, discipline, patience, and superior execution, it is possible. The compounding effect for two decades may result into such fantastic results. Don’t underestimate the strength of dividend over longer time horizon. The power of compounding is a robust concept.

If you're looking for a "benchmark" to compare your household investment strategy against, I'd start with a total world stock market index People tend to gravitate toward the S&P 500, but this is just the US stock market There is still ~40% of the investable universe outside US Now you might start asking yourself why even own international companies when they've substantially underperformed the last decade + fair point but when you consider the longer-term track history, there have been periods of reversion and outperformance by Int'l Up until the GFC, Int'l returns were in line with US and provided some risk-reward (diversification benefits) Obviously past performance doesn't guarantee future results so one might speculate that int'l could revert and outperform in the future To circle back, a total world stock index is a good starting point for a "benchmark" when considering performance You'll also want to consider how much of different asset classes you own relative to a 100% stock portfolio for an apple to apples comparison

Investing should not be focused on gimmicks or trying to time the market (however this year has the cap gains inclusion rate increase in late June, so maybe this year is a weird one). Beyond that, buy things well and generally hold them. We tilt our client portfolios as the markets change but predominantly follow themes for many years at a time, with a collaborative approach with our investors. If that sounds like something you’re looking for we should have a coffee or tea together.

We’re pleased to share with you our latest contribution to Livewire Markets Outlook Series 2024, highlighting several reasons we believe the smaller segment of the ASX looks attractive for investors in 2024. The underlying fundamentals appear hard to ignore with cheaper valuations, superior growth, and a broader stock universe.   In this article Nick Sladen from LSN Capital Partners describes recent M&A activity in small caps, citing Pacific Smiles Group (PSQ.ASX), Adbri Limited (ABC.ASX) and Link Group (LNK) (LNK.ASX). Nick also highlights two stocks to look out for in 2024 in the circular economy (Close the Loop Group (CLG.ASX)) and digital media space (oOh! (OML.ASX)).   Our investment views are reflected in how we manage the LSN Emerging Companies Fund, a wholesale small companies fund that is available on Netwealth, HUB24 and PowerWrap. LSN Capital Partners Nick Leitl Nick Sladen Livewire Markets Christopher Conway https://lnkd.in/gmjTp4ai

For investors interested in our current views on the market but not particularly excited about reading a sixteen-page letter, this overview from Google's NotebookLM is pretty wild. It's an automated “deep dive” discussion summarizing key topics in our mid-year letter to investors. Quite impressive for an experimental AI feature. https://lnkd.in/ezH8TheS