Idea triage
Work for the long weekend
Major indices are at all-time highs, major IPOs are occurring and froth seems to be gathering in certain pockets of the equity market. Long-term interest rates seem to have stabilized between 4-5% and inflation seems to have found a floor around 3%. Energy prices as measured by spot crude and Henry Hub seem to have found stable footing. Market conditions seem calm, with each of these factors feeding on the other. Does this mean we’re closer to a top than a bottom? No idea- but we are probably still within a zone of reasonableness for individual equity values. I remain paranoid about everything, but what can you do?
I’ve been attempting to get smart on a few industries that optically show value at today’s prices and earnings- numbers seem to warrant further investigation for valuation justification. I’ve added a few to the portfolio, just on speculation (the old adage “invest, then investigate”) while trying to remain objective in my evaluation. I’ve spoken at length on the dangers of “pounding in by shouting out” certain ideas through the newsletter- but that’s a risk I believe my readers are smart enough to figure out.
I’ve bucketed individual names/groups into a rough tier list based on my intuition of where I think the best value lies.
S-Tier: