Finding hidden gems with a 99th-percentile investor
Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every Tuesday.
Dear Readers,
Depending on which Wall Street titan you ask, the US economy is either sprinting towards a sharp V-shaped summer rebound, or limping towards a more gradual, drawn-out recovery.
In one corner you have Blackstone CEO Stephen Schwarzman, who's all-in on what he calls a "big V" snap back to economic normalcy in the next couple months.
In the other you have Goldman Sachs CEO David Solomon. While he claims his more sluggish forecast is also V-shaped, he acknowledges it'll face serious hurdles into year-end and 2021. That outlook jibes with his view that the stock market's recent rally off lows has gotten overdone, largely because of economic overoptimism.
If these heavyweights can't come to a clear consensus, it's no wonder markets have been whipsawed by every new economic-reopening headline, positive or not. And to make matters more confusing for investors, certain sectors and companies have been thrown for a loop by factors not directly tied to an economic recovery.
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Last week, bank shares soared on news a financial-crisis-era regulation had been rolled back, only to plunge the following day after the Fed said it will suspend buybacks and limit dividends across the industry.
Facebook has also been a lightning rod for shifting investor whims. It shed roughly $60 billion of market value across just two days as high-profile advertisers backed away — then climbed sharply once again, with traders seemingly unperturbed.
Confusing times call for clarity, and the Investing team at Business Insider is here to unpack the ever-changing market landscape. See below for our best stories of the week, including a wide array of recommendations, strategies, and tips for navigating uncertainty.
Thanks for reading!
-- Joe
Join Business Insider on July 8 at 12 p.m. ET for "Planning for the Future in Uncertain Times," a free digital event and part of the Master Your Money series. Presented by Fidelity, it will explore components of a strong financial plan and how to adjust it given recent events.
Finding hidden gems with a 99th percentile investor
Fund manager Aram Green specializes in finding promising companies that are about to start getting a lot more attention. His ClearBridge Select Fund has long been one of the strongest performers in the space, as it's doubled its benchmark over the last five years and won a five-star rating from Morningstar.
Green shared with Business Insider a series of surprising post-coronavirus bets in stocks that have either fallen too far due to temporary problems, or escaped harm that investors once expected.
Read the full story here:
Aram Green has crushed 99% of his stock-picking peers over the last 5 years. He details his approach for finding hidden gems — and shares 6 underappreciated stocks poised to dominate in the future.
4 winning trades for upcoming earnings season
Second-quarter earnings season will kick off in July, with investors eager to see how the wide-reaching influence of the COVID-19 outbreak will continue to affect corporations.
Business Insider spoke with three experts who laid out where they think investors should be looking and putting their money ahead of likely market fluctuations. Some of the recommendations are pegged to industry fundamentals, while others look to capitalize on pricing dislocations created by post-coronavirus market turbulence.
Read the full story here:
We spoke with 3 financial experts, who said to make these 4 trades right now to get ahead of surprising gains when earnings season starts next month
The shift one real-estate investor made to start succeeding
Jacob Blackett — the CEO of Holdfolio and founder of SyndicationPro — decided he'd give real-estate investing a try after seeing a fix-and-flip seminar advertised on a late-night infomercial. After he lost approximately $70,000 on his first deals, Blackett switched strategies.
As he gained experience, he fine-tuned his approach to alleviate the large tax bills he was incurring. Today Blackett sports a portfolio worth about $188.4 million with 1,040 units.
Read the full story here:
From a late-night infomercial to a 1,040-unit empire worth $188 million, how Jacob Blackett perfected his real-estate-investing strategy after losing $70,000 on his first deals
Stock pick central
Seeking experts who are willing to name names? Look no further:
- Morgan Stanley handpicks 10 stocks to buy now for the richest profits as travel and outdoor activities transform in the post-pandemic world
- Jefferies says buy these 14 cheap stocks that are financially strong and positioned for market-beating returns
- The chief strategist of $2.5 trillion State Street recommends 7 ETFs for investors looking to profit from a permanently altered post-coronavirus landscape
- A CEO overseeing $147 million outlines his 4-part strategy for identifying which stocks to buy — and shares 2 he sees primed to explode higher right now
Chart of the week
If the stock market this year has felt extraordinarily topsy-turvy, the chart above shows it's been exactly that. From the fastest bear market in history to the torrid recovery since, the S&P 500 and VIX — which generally trade inversely to one another — have been all over the place.
Julian Emanuel, the chief equity and derivatives strategist at BTIG, has crunched data going back to 1990 and concluded that a fresh round of stock-market selling could be in the cards.
Click here for more details
Quote of the week
"If they get the market to a level where it wouldn't be but for their buying, then does that mean that markets are dependent on the Fed buying forever? What happens if they stop and will they stop doing it forever?"
— Howard Marks, billionaire co-founder and co-chairman of Oaktree Capital Management, on the Fed's monetary stimulus efforts