We don’t need the economic setting to be perfect for the market to move higher. We just need it to be better than is currently priced in.
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We don’t see the recent jolt in inflation as sustainable and as as result we expect investor fears to gradually calm down over the next year. In the meantime, ICON will continue to focus on value.
Are low bullish readings a rational representation of the market or do they signal a buying opportunity? Historical data has shown us that time of low AAII Sentiment readings often lead to steady growth over the long-term.
Over the last two weeks, I have seen one of the most amazing things I have seen in all my years of watching the financial markets. Two weeks ago M1 grew…
Based on intrinsic value being the present (or discounted) value of their future earnings, the rally of 2020 is very sensible. Investors are pricing in the future, not the present.
Rather than reading the news, ICON uses intrinsic value. From horrible to mediocre to good, we believe value tells us what expectations are built into stock prices.
There is disagreement on value regarding the overall stock market. ICON thinks stocks, in general, are underpriced relative to their intrinsic value but many analysts are stating stocks are expensive. We presume analysts who think stocks are expensive are basing their views on the broad market P/E. Who’s right, and why the disagreement?
At ICON, we invest according to our valuation system and don’t rely on emotions. We also believe that the market leads the economy. Therefore, if one sees low bullish readings of AAII sentiment as contrarian, the current market could actually be a historic buying opportunity.
The SBI Portfolios buy and hold the best strategies and the most strategy consistent managers in those strategies according to our system. In using this process we’ve observed that the effectiveness of each strategy may vary through changing economic and financial market conditions. One such example during this most recent market volatility is ICON’s SBI Global Moderate Portfolio
It seems timely to recall a metaphor described by Benjamin Graham, the ultimate value investor. In reference to the stock market, he wrote of “Mr. Market.”