The hottest Investment Strategies Substack posts right now

And their main takeaways

Testing Times: Market Turmoil and Investment Serenity

Musings on Markets • 0 implied HN points • 10 Feb 18

In a market crisis, it's easy to lose perspective and panic. It's important to step back, assess the damage, and remember your long-term gains.
Market drops can happen for different reasons, including fear, fundamentals like rising interest rates, or a reassessment of risk. Understanding the cause can help guide your decisions.
Having a solid investment philosophy is key. Stick to your beliefs about investing, especially during turbulent times, and make decisions that align with your core principles.

January 2018 Data Update 8: Debt and Taxes

Musings on Markets • 0 implied HN points • 29 Jan 18

💰 Finance Debt Management Tax policy Capital Structure Corporate Finance Investment Strategies

The U.S. tax code has favored debt financing, giving businesses tax advantages for taking on debt rather than using equity. This has encouraged many companies to load up on debt for growth.
Recent tax reforms have reduced the benefits associated with debt, leading companies to rethink how much debt they carry. This could lower overall borrowing and help stabilize businesses.
As companies adjust to these new tax rules, we may see a trend of firms paying down debt and reconsidering their capital structures, which could lead to less volatility in their financial performance.

January 2018 Data Update 5: Country Risk Update

Musings on Markets • 0 implied HN points • 25 Jan 18

💰 Finance Risk Assessment Investment Strategies Market Analysis Economic Indicators

Country risk affects a company's equity risk. It's important to look at where a company operates instead of just where it's based.
Different countries have different levels of investment risk. Higher risks usually require higher returns to make them worthwhile.
Companies' cost of capital should vary based on the geographic locations of their projects. So, a project in one country might have a different hurdle rate compared to another.

A Tale of Two Markets: Politics and Investing!

Musings on Markets • 0 implied HN points • 06 Jun 17

💰 Finance Market Analysis Investment Strategies Risk management Economic Indicators Behavioral Finance

There is a big divide among investors about the current market. Some think a crash is coming while others believe a new bull market is starting.
People are showing different feelings about risk. For some, the market seems stable, but others see a lot of uncertainty in economic policies.
Consumer confidence is up, but spending hasn't followed. Both consumers and businesses feel good about the future, but they aren't investing as much as expected.

Family Feuds: The Promise and Peril of Family Group Companies!

Musings on Markets • 0 implied HN points • 17 Nov 16

💼 Business Corporate Governance Investment Strategies Financial Analysis Economic Development

Family group companies can have strong connections that help them succeed, but relying too much on relationships can lead to cronyism and limit growth.
These companies often use their internal capital to support other businesses in the group, which can be beneficial but may also lead to poor investment decisions.
When families control companies, they can make long-term good choices, but this same control can lead to resistance to change and mismanagement.

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The Trump Effect on Markets: A Financial (not a Political) Analysis!

Musings on Markets • 0 implied HN points • 11 Nov 16

💰 Finance Market Analysis Investment Strategies Economic Policy Risk management Financial trends

Market reactions to big political events can be surprising and unpredictable. After the election, there were initial drops but then the markets bounced back, showing that how investors react can change quickly.
Expert predictions are not always reliable. In this case, many experts predicted doom, but the market's actual response showed that the public often trusts their instincts over expert advice.
Stories can influence outcomes more than statistics. The narratives around Brexit and the Trump election resonated with many voters, suggesting that emotional connections can sometimes matter more than hard data.

The Brexit Effect: The Signals amidst the Noise

Musings on Markets • 0 implied HN points • 29 Jun 16

💰 Finance Market Analysis Investment Strategies Economic Trends Risk Assessment Global Economics

Brexit caused big market reactions, with the British Pound losing value quickly against the US Dollar. This showed that currency fluctuations can signal larger economic issues.
Experts were often wrong in their predictions about Brexit's consequences, leading many to distrust their advice. This highlights how people sometimes ignore experts in favor of their own beliefs.
Stories matter more than numbers in shaping public opinion. The Leave campaign had a stronger narrative, which attracted more support compared to the Remain side's focus on statistics.

January 2016 Data Update 3: Country Risk and Pricing

Musings on Markets • 0 implied HN points • 09 Jan 16

💰 Finance Risk management International Markets Valuation Methods Investment Strategies

Country risk matters for business, and it's based on where a company operates, not just where it is based. Companies can face risks from markets they rely on for revenue.
Different countries have different levels of investment risk, affecting equity risk premiums. Understanding these risks helps investors make better decisions.
Stocks from various countries are priced differently, often reflecting local market conditions. It's important to consider these multiples when investing internationally.

January 2016 Data Update 1: The US Equity Markets

Musings on Markets • 0 implied HN points • 04 Jan 16

💰 Finance Equity markets Investment Strategies Market Analysis Risk Assessment Financial Data

In 2015, US equity markets showed resilience despite facing significant crises, with the S&P 500 ending almost unchanged, which is a positive outcome given the challenges.
The equity risk premium (ERP) for stocks is currently at 6.12%, suggesting that investing in stocks might offer good returns compared to risk-free assets, but this is based on softer earnings than before.
Caution is needed, as the current high ERP could drop if earnings fall or bond rates rise, so it's essential to keep an eye on these factors when investing.

Putting a Price Tag on Scandal: Sturm und Drang at Volkswagen!

Musings on Markets • 0 implied HN points • 01 Oct 15

💼 Business Investment Strategies Financial Analysis Automotive Industry

Volkswagen faces huge financial losses from a scandal where they cheated on emissions tests. This has led to a significant drop in their stock price.
The company is likely to incur billions in legal penalties and costs for recalling cars. They have set aside $7.3 billion to cover these expenses, but fines could reach much higher.
Despite the scandal, there are arguments that the market may have overreacted to Volkswagen's situation. Some see potential value in investing in the company due to its established market presence.

Another Market Crisis? My Survival Manual/Journal!

Musings on Markets • 0 implied HN points • 26 Aug 15

💰 Finance Market Analysis Investment Strategies Risk management Economic Trends Portfolio Management

Market crises cause a sharp increase in the price of risk, which leads to a drop in the value of risky assets. It's important to keep an eye on this price of risk to understand market movements.
During a crisis, liquidity becomes very important. Investors prefer liquid assets more than ever, and companies with strong cash positions generally fare better.
It's easy to panic during market downturns, but it's crucial to stick to a personal investment strategy. Taking a step back and avoiding constant checking of the market can help manage anxiety.

Billion-dollar Tech Babies: A Blessing of Unicorns or a Parcel of Hogs?

Musings on Markets • 0 implied HN points • 11 Jun 15

💼 Business Venture Capital Startups Valuation Investment Strategies Market Trends

Unicorns are private companies valued over a billion dollars, and their numbers are increasing. This rise can be both good due to more investment options and concerning if it's just a bubble.
Valuing unicorns isn't straightforward because capital investments and protections can distort their true worth. For example, investors might gain ownership stakes that adjust based on company value changes.
While protections help investors feel secure, they can complicate the investment landscape. Both investors and founders should strive for clarity and balance to avoid overvaluing companies or risking too much equity.

The Oil Price Shock: Primary, Secondary and Collateral Effects

Musings on Markets • 0 implied HN points • 22 Dec 14

💰 Finance Market Analysis Economic Impact Investment Strategies Oil industry

Predicting oil prices is very hard, and even experts often get it wrong. This shows that forecasting in the commodity market doesn't always lead to clear answers.
When oil prices change, some people and companies benefit while others lose. It takes time to see the full effects of these changes on the economy.
Investors usually panic during big price shifts, leading to poor decisions. It's better to think strategically rather than react emotionally to price drops in oil.

Up, up and away! A crowd-valuation of Uber!

Musings on Markets • 0 implied HN points • 03 Dec 14

💼 Business Valuation Market Analysis Investment Strategies Startup Growth Financial Modeling

Valuation isn't just about the numbers; it's also about the story behind those numbers. Your personal views and biases will shape how you value a company like Uber.
Different narratives can lead to vastly different valuations. If you see Uber as having a huge market potential, you might arrive at a value much higher than someone who sees it more conservatively.
It's important to update your narrative as new information becomes available. Successful investors often get the narrative right, even if their number crunching isn’t perfect.

The Walking Dead: Blackberry, Yahoo and the Zombie Apocalypse!

Musings on Markets • 0 implied HN points • 30 Sep 14

💼 Business Corporate Governance Market Analysis Investment Strategies Technology Companies Business Models

Some companies can stick around even after their business model has failed, like zombies in a show. They keep going but aren't really successful anymore.
Managers of these struggling companies often believe they can fix things, even when it's clear their efforts are not working. They might waste resources trying to revive the business.
When investing in these 'walking dead' companies, it's important to recognize that their management may make bad decisions, leading to further losses. Investors should be cautious and realistic about their value.

Bubble, Bubble, Toil and Trouble: The Costs and Benefits of Market Timing

Musings on Markets • 0 implied HN points • 16 Jun 14

💰 Finance Market Analysis Investment Strategies Economic Indicators Stock Market Risk Assessment

There are different types of people who warn about stock market bubbles, like Doomsday Bubblers and Rational Bubblers. Each type has its own view on whether we are in a bubble or not.
A bubble can be defined as a situation where stock prices rise significantly without support from the actual company's earnings or fundamentals. It's important to notice the difference between a real bubble and just market fluctuations.
Deciding whether to react to a potential bubble is tricky. You could either reduce your investment in stocks or try to profit from a correction, but both options have their own risks and costs.

Alibaba: A China Story with a profitable ending?

Musings on Markets • 0 implied HN points • 09 May 14

💼 Business E-commerce Valuation Market Analysis Investment Strategies Corporate Governance

Alibaba entered the e-commerce market in China early and grew with it. They adapted their services to fit local needs, making them a key player in online retail.
The company has a unique approach, charging low transaction fees and focusing on advertising revenue. This has helped them maintain a competitive edge in a crowded market.
Alibaba's growth is impressive, but future challenges include rising competition and changes in market conditions. Investors should keep an eye on these potential risks.

Numbers Time! Data update for 2014

Musings on Markets • 0 implied HN points • 09 Jan 14

💰 Finance Data Analysis Investment Strategies Corporate Finance Global Markets Valuation Techniques

Data access has changed a lot over the years. In the past, it was hard to find data unless you were at a university or bank, but now it's way easier and more global.
The reason for sharing this data is partly self-interest. It helps the creator make better investment decisions and save time throughout the year.
When using this data, remember that it reflects personal judgments and can include errors. It's important to verify details and be cautious when making decisions based on the numbers.

Market Multiples: Global Comparison and Analysis

Musings on Markets • 0 implied HN points • 30 Jul 13

💰 Finance Market Analysis Investment Strategies Global Markets Risk Assessment

PE ratios help investors compare stock prices across countries, but many companies have negative earnings making PE less useful for them. It's important to consider the overall financial health of countries, not just their PE ratios.
Price to book ratios can give a clearer picture of a company's value but should be used carefully. Countries with low price to book ratios might look cheap but could also have low returns, suggesting a deeper look is needed.
Enterprise value to EBITDA multiples provide another way to assess company value, though they can sometimes show unexpected results. High returns on invested capital don't always align with high EV/EBITDA ratios, so understanding each country’s context is key.

A Sweet Spot for US Equities: Opportunity and Dangers

Musings on Markets • 0 implied HN points • 28 Mar 13

💰 Finance Equity markets Investment Strategies Market Analysis Risk Assessment

US stock markets are currently doing well, but investors should be cautious about potential downturns or corrections. It's important to stay informed and not just ride the wave of rising prices.
Key factors determining stock prices are cash returned to investors, expected growth, risk-free rates, and risk premiums. Each of these plays a role in how we value and perceive stocks.
Despite some risks, stock prices are elevated for good reasons: strong cash flows, decent growth prospects, and poor returns from alternative investments make staying in the market appealing.

Marty Lipton: Shareholder Champion, Stakeholder Protector or Management Tool?

Musings on Markets • 0 implied HN points • 10 Mar 13

💼 Business Corporate Governance Investment Strategies Activism Financial regulation

Activist investors are not necessarily short-term thinkers. Studies show that they often hold onto their investments longer than many passive investors, and they focus on getting companies to do what's best for their shareholders.
It's okay for activists to speak out and share their opinions. Just like other investors, they have the right to use media to explain their views and more open discussions can help companies improve.
Long-term shareholders actually benefit from activist investors. These activists push for changes that can help improve a company's performance and protect shareholders from unaccountable management.

Data Update 2013: The Dark Side of Numbers

Musings on Markets • 0 implied HN points • 13 Jan 13

💰 Finance Data Analysis Corporate Finance Investment Strategies Risk Assessment Economic Indicators

Some people use complex numbers to scare others into agreeing with them. You can fight this by sticking to common sense and focusing on the main idea.
Data can be twisted to support a certain viewpoint by only showing what fits. Always check for the full picture before believing claims.
Many analysts hide behind data instead of making tough decisions. It's better to personalize and adapt data to your own understanding rather than rely on generic numbers.

Storms and Stocks: Dealing with Disruptive Shocks

Musings on Markets • 0 implied HN points • 16 Nov 12

💰 Finance Investment Strategies Risk management Market Trends Economic Events Crisis response

When you see repeated problems, like storms or market issues, it’s likely they will keep happening. This means we should change how we invest and manage risks.
Relying too much on past events can lead to bad choices. Just because something worked before doesn’t mean it will work again in a similar situation.
After disruptions, there’s often a lack of clear information, causing people to believe rumors. It’s important to have systems that can adapt and provide real guidance during crises.

Value Investing: Where is the beef?

Musings on Markets • 0 implied HN points • 29 Jun 12

💰 Finance Investing Market Analysis Investment Strategies

Value investing includes many strategies, but it often assumes that value investors have a clear advantage over others. However, this belief isn't always supported by the evidence.
Studies show that while some individual investors can outperform the market, many do not. Those who invest based on solid research and have focused portfolios tend to perform better.
Successful value investing combines having a strong investment philosophy, a competitive edge, discipline, and an openness to learning from other investing strategies.

Growth (Part 1): The Limits of Growth

Musings on Markets • 0 implied HN points • 26 Oct 11

💼 Business Business Growth Market Size Revenue management Valuation Techniques Investment Strategies

When valuing growth companies, you need to think about how big their revenues can actually get based on the market size. Companies in larger markets can expect to earn more than those in smaller markets.
Some companies can surprise everyone and grow more than expected by changing what they sell, expanding to new places, or coming up with new innovations. This can make their potential market much bigger.
Investors often get the big picture right but mess up when looking at individual companies. They might think many businesses can grow quickly, but if they all try to take a big share of the market, profits can get squeezed.

Growth and Value: Thoughts on Google, Groupon and Green Mountain

Musings on Markets • 0 implied HN points • 19 Oct 11

💼 Business Investment Strategies Market Analysis Financial Metrics Business Models

Growth is not always sustainable. Companies like Green Mountain Coffee have to consider how big their market really is and how long they can keep growing.
As companies grow, their growth rates usually slow down. Even successful companies like Google face challenges in maintaining high growth as they get bigger.
Investing for growth can be tricky. Companies need to spend money to grow, but if they don't manage investments wisely, it can hurt their overall value.

Behavioral Economics: Thoughts on Value and Price

Musings on Markets • 0 implied HN points • 01 Mar 11

💰 Finance Behavioral Economics Investment Strategies Valuation Methods Market Dynamics

Different analysts can value the same company differently because their psychology and perspectives affect their judgment. This is why some people become buyers while others are sellers.
Prices can differ from actual value due to irrational investor behaviors, like panic selling or following trends. Even when people have similar information, their emotions can lead to significant price deviations.
Behavioral economics helps us understand how and when prices will align with value again. Knowing this can guide investors on how long they might wait for their investments to pay off.

Buybacks and Stock Prices: Good or bad news?

Musings on Markets • 0 implied HN points • 25 Jan 11

💰 Finance Stock Markets Corporate Finance Investment strategy Valuation Methods Market Analysis Corporate Finance Stock Market Investment Strategies Financial Analysis Market Valuation

Buybacks can increase stock prices if the market undervalues cash. If investors think the cash is wasted, buying back shares can make the stock more valuable.
Companies with little debt that buy back shares can improve their value. However, if a firm is already in a strong position, a buyback might send negative signals about future growth.
Mature companies often benefit more from buybacks because they might be seen as having poor returns on their investments. In contrast, fast-growing companies may harm their stock prices if they buy back shares.

Herding behavior: Why, so what and what if?

Musings on Markets • 0 implied HN points • 15 Jan 11

💰 Finance Investment Strategies Market Trends Behavioral Finance Risk management Corporate Finance Investment Strategies Market behavior Hedge Funds Risk management Corporate Finance

Herding behavior is when people follow the crowd, which we see in many areas of life, including finance. This can lead to investors buying or selling the same stocks at the same time.
This behavior can cause problems like pricing bubbles and make markets more volatile. When many people act in the same way, it can lead to big changes in stock prices.
Investors can make money by either joining the herd during trends or by going against it if they have a strong understanding and confidence in their choices. But it takes skill to do it successfully.

How do you evaluate risk taking?

Musings on Markets • 0 implied HN points • 19 Nov 10

💰 Finance Risk Assessment Investment Strategies Market behavior Economic Policy Corporate Governance Risk management Investment Corporate strategy Decision-making Market Analysis

Risk taking should be judged not just by the outcome but also by the process and information available at the time. Good decisions can sometimes lead to bad outcomes, and bad decisions can lead to success.
It's important to consider the side effects of risk taking, like how it impacts others. A decision might be profitable for one person but harmful to society as a whole.
How we reward or punish risk taking now can influence future behavior. If taking risks is consistently rewarded, more people will take risks in the future.

The secret to investment success: Self Awareness?

Musings on Markets • 0 implied HN points • 11 Nov 10

💰 Finance Investing Psychology Market Analysis Investment Strategies Personal Finance Investment Strategies Behavioral Finance Market Analysis Risk management Personal Finance

Investment success isn't just about strategy; it's about knowing yourself. How patient are you? Do you handle stress well? These traits matter.
Different investment philosophies work for different people. What might be a good strategy for one person could be a bad fit for someone else.
Self-awareness can help you choose the right investment approach. Think about your personality and how you react to different situations before investing.

Insider Trading: My Perspective..

Musings on Markets • 0 implied HN points • 24 Oct 09

💰 Finance Investing Regulation Market Analysis Corporate Governance Economic Policy Insider trading Investment Strategies Stock Analysis

Insider trading is when some investors trade using secret information not available to everyone. It's legal for company insiders to buy stock if they don’t do it right before big news, but illegal if they do.
Studies show that insider trading doesn't always lead to big profits. Insiders might have better info, but they don't always make more money from it, and relying on tips can be risky.
Instead of banning insider trading, we could make trading more transparent. This way, everyone can see what insiders are doing, which might level the playing field a bit.

Buybacks and Stock Prices..

Musings on Markets • 0 implied HN points • 20 Sep 09

💰 Finance Stock Market Corporate Finance Investment Strategies Financial Analysis Economic Trends

Buybacks give companies a way to return cash to shareholders without the long-term commitment of dividends. They also help adjust financial leverage, especially if a company feels it has too little debt.
When a company decides to buy back its stock, it's usually based on how the price compares to the company's perceived value. If they think the stock is worth more than its current price, they'll consider buying it back.
Sometimes companies buy back stock just to follow what others in their industry are doing, which may not always be the best choice for their own financial health.

Valuing declining and distressed companies

Musings on Markets • 0 implied HN points • 30 Jun 09

💼 Business Corporate Finance Valuation Methods Investment Strategies Market Analysis Risk management Investing Valuation Market Analysis Corporate Finance Risk Assessment

Declining companies often show stagnant or even falling revenues over time. This can signal a deeper issue, especially if it's happening across their whole industry.
These firms frequently deal with shrinking profits due to losing pricing power and competition. As a result, they might start selling off assets to stay afloat.
Declining companies might pay out large dividends or buy back stock, but this can be risky. If they have a lot of debt, it could make their financial situation even worse.

Data update for January 2009

Musings on Markets • 0 implied HN points • 20 Jan 09

💰 Finance Market Trends Risk Assessment Valuation Metrics Investment Strategies Corporate Finance Investing Market Analysis Risk management Corporate Finance Emerging Markets

Equity risk premiums and default spreads dramatically increased in 2008, making companies worth about 40% less today than the year before, even if their earnings and ratings stay the same.
During a crisis, emerging markets suffer the most, and risk premiums for these markets have also risen significantly, affected by higher premiums in developed markets.
Although market multiples look cheap right now, the accounting numbers are outdated, meaning the full impact of the crisis isn’t reflected yet, and an update is expected in May 2009.

The Crisis of 2008: Lessons learned, unlearned and reinforced

Musings on Markets • 0 implied HN points • 31 Dec 08

💰 Finance Market Analysis Investment Strategies Risk management Economic Trends Behavioral Finance

Interest rates can be negative, which is surprising. It shows how unexpected financial situations can be.
Investing in established companies isn't always safe, and relying on certain rules can lead to mistakes. The financial landscape can change quickly.
Cash can be an important safety net, and understanding risk is more complex than just looking at numbers. Real-world connections matter too.

Corporate Hedging: The Down Side

Musings on Markets • 0 implied HN points • 27 Nov 08

💰 Finance Risk management Corporate Finance Investment Strategies Market Analysis Derivatives Risk management Investment strategy Derivatives Corporate Finance Market Analysis

Not all risks should be hedged. Some risks can be passed on to investors who may want that exposure, like how oil companies shouldn't hedge oil prices.
Companies should hedge against important risks that can greatly affect their operations, like insurance for physical damage or stabilizing fuel costs for airlines.
Firms can also benefit from seeking out risks where they have an advantage. This can lead to success if they understand and exploit those risks well.

What is the message the market is sending?

Musings on Markets • 0 implied HN points • 25 Oct 08

💰 Finance Market Trends Economic Indicators Investment Strategies Risk management Global Economics

The market is currently focused on the economy rather than banking issues. Investors are worried about a possible recession next year.
Historically, the market isn't always a reliable predictor of economic slowdowns. A big drop in the market can suggest a slowdown, but not every decline leads to a recession.
Some positive factors are still present, like falling oil prices and low global interest rates, which could help the economy recover in the future.

Is it time to make the move?

Musings on Markets • 0 implied HN points • 07 Oct 08

💰 Finance Market Trends Investment Strategies Economic Growth Stock Analysis Risk management

The market drop was influenced more by worries about the economy rather than just fear, showing a different sense of urgency than previous weeks.
The equity risk premium in US stocks is higher than usual, suggesting either a big change in the markets or that stocks are undervalued.
When looking for investments, focus on stable companies with essential products, strong earnings, low debt, and reasonable prices.

Explaining the Market....

Musings on Markets • 0 implied HN points • 05 Oct 08

💰 Finance Market Analysis Investment Strategies Economic Trends Behavioral Finance Financial Reporting

Market moves can be unpredictable and often relate to expectations rather than absolute news. For instance, a good earnings report can be seen as bad if it doesn't meet high expectations.
Many factors can influence the market on a given day, making it tough to identify the exact cause of movements. It could be anything from economic data to global events.
Experts providing explanations after market shifts helps us feel more in control, even if the reasons are not always clear. These insights can give us perspective and help us move forward.