Tag Archives: equities

Apr 29, 2021

Woodstock for Capitalists

Berkshire Hathaway is scheduled to hold its annual shareholders’ meeting this Saturday, May 1. This is the second consecutive year in which the meeting will be virtual; in 2019, attendance was nearly 40,000, which makes social distancing somewhat difficult. We noted two years ago that Berkshire’s investment performance, though formidable over the long run, had…

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Apr 15, 2021

Hidden in Plain Sight

International equity investors have long participated in the U.S. market, but their interest has often focused on the globally recognized blue chips included in benchmarks such as the Dow® and the S&P 500®. In doing so, they may be missing out on the long-term outperformance of smaller companies; presently, they may also be missing out…

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Mar 18, 2021

SPIVA and Style

Last week S&P Dow Jones Indices released its SPIVA® U.S. Year-End 2020 Scorecard. As has been the case for 17 of the past 20 calendar years, the majority of active large-cap managers underperformed the S&P 500®. Performance was better for mid- and small-cap managers, as Exhibit 1 shows. What caused the advantage for smaller-capitalization strategies?…

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Mar 8, 2021

A Change in Fortune

Three months ago, we observed that times of severe underperformance for Equal Weight can bode well for future performance. This reflection had become reality by the end of February. After almost four years of underperformance, the S&P 500® Equal Weight Index outperformed the S&P 500 by 1.6% over the past 12 months, as we see…

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Feb 23, 2021

Man Bites Dog: The Year for Active Management?

For at least five years, we’ve noticed that, despite historical performance, active managers regularly proclaim that this year will at last be the time when active management shows its value. I suspect that most advocates of indexing derive at least some guilty pleasure from observing this ritual. (I know I do.) So, we want to…

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Feb 3, 2021

Efficient Markets and Irrational Exuberance

Recent headlines have reflected the extraordinary behavior of GameStop Corp.; the company’s stock rose from $18.84 at year-end 2020 to $325 at the close on Jan. 29, 2021, then declined to $90 in the first two trading days of February. At year-end, GameStop was the 314th largest stock in the S&P SmallCap 600®. By the…

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Jan 20, 2021

Latin American Equities Close the Year in the Red Despite the Strongest Q4 in 20 Years

Volatility is often the name of the game in Latin America. While 2020 was no exception, global markets also rode the COVID-19 volatility wave (see Exhibit 1). The global pandemic exacerbated uncertainty around the world and all capital markets were affected, particularly during Q1 2020. In Exhibit 1, we can see that the S&P Latin…

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Jan 7, 2021

A Reversal, or Two

For many equity investors, the stand-out theme of last year was the reversal in the market’s initial response to, and recovery from, the COVID-19 pandemic: the dramatic price declines in March, the wild swings around the bottom as VIX® marked its highest closing level ever, and the just-as-dramatic recovery to new all-time highs by late…

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Jan 4, 2021

Persistence

Lyndon Baines Johnson became President of the United States at a moment of national trauma, and left office at a time of tremendous political division. Despite a landslide electoral victory in 1964 and notable legislative achievements, his was not a happy presidency. LBJ observed, in fact, that “being President is like being a jackass in…

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Dec 14, 2020

Core Considerations: Why Liquidity Matters

Learn how the liquidity and interconnectivity of the S&P 500 ecosystem benefits market participants. CME Group’s Tim McCourt and State Street Global Advisors’ Rob Forsyth join S&P DJI’s Craig Lazzara to discuss.   Learn more: https://www.spglobal.com/spdji/en/research/article/a-window-on-index-liquidity-volumes-linked-to-sp-dji-indices/

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