Earnings Visibility Improving
Last year during first quarter 2020 earnings season – the first period impacted by the novel coronavirus – we advised investors to pay attention to the words and tone used by management teams discussing current business conditions. Words mattered more than the numbers as Wall Street analysts were forced to reduce forecasts significantly for 2020. Now, we know the lowered estimates were too conservative. As the recovery unfolds, it appears the S&P 500 is on the verge of returning to positive growth for the first time since the end of 2019. We now believe the words
and the numbers matter.
This week’s focus on earnings is about more than just earnings season. Concerns over market valuation are growing louder. Corporate earnings garner attention as one of several financial components of a company’s performance. Ratio-based analysis, a common approach used to assign values to companies, helps us determine relative valuation. The S&P 500 is current
February 18, 2021
Megatrends like robotics and artificial intelligence have proliferated during the pandemic. ETF investors looking to get exposure to this disruptive technology can look to funds like the
BOTZ seeks to invest in companies that stand to benefit from increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
Additionally, BOTZ seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index. The index itself captures large- and mid-cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries.
February 18, 2021
Market participants have recently expressed concern about the regulatory environment around major Chinese internet stocks, including Alibaba. Those concerns may be overblown. Investors will still want to consider the
PGJ seeks to track the investment results of the NASDAQ Golden Dragon China Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index.
The underlying index is composed of securities of U.S. exchange-listed companies that are headquartered or incorporated in the People’s Republic of China. Unlike some China ETFs, PGJ does a decent job of spreading exposure throughout the economy; weightings to banks and energy aren’t overwhelming, and the often-overlooked tech sector receives significant attention too.
Weekly Update
Markets have a tendency to do what they can to surprise the masses. We see this occur often, particularly when we try to relate the news to market events. GameStop was an exaggerated example of this. GameStop, a brick-and-mortar shop where you can purchase physical copies of video games, is a dinosaur company. Video games are easily downloaded straight to gaming consoles today, and there is a possibility that the video game store may be the next Blockbuster. I think it is safe to assume that the masses were surprised when a flood of internet investors drove the stock price up from $4 per share in August to nearly $500 per share in late January. I think most speculators that took a position in the stock after it had already hit the news cycle were equally surprised when it did not continue to go up, and in fact dropped -89% from the peak in about a week’s time.