Succinct Summation of Week’s Events for 4.5.19 (plus INVESTMENT SUCCESS SECRETS)

Below is the customary weekly summation, the positives being that the market seems to be once again stabilizing and the fears of recession that were raised a couple weeks ago have now abated.  The negative is that, even though the positive column revealed higher than expected payrolls, the negative column shows lower than expected new jobs? Can they both be right?  The bonus this Sunday is the latest edition from WealthTrack on PBS, this week's program revealing "Investment Success Secrets" from Gotham Asset Management.  The 30 minute program is available on the WealthTrack/PBS website.  As an additional note, I would also like to comment that tonight's episode of 60 Minutes had a very informative interview with investment genius Ray Dalio of Bridgewater Associates, who has also been interviewed a number of times on WealthTrack.  The CBS/60 Minutes web site will likely have the program available for streaming in a week or so.  Hope everyone enjoyed their weekend.

Succinct Summation of Week’s Events for 4.5.19

April 5, 2019 4:30pm by Barry Ritholtz

Succinct Summations for the week ending April 5th, 2019

Positives:

1. Markets seem to have regained their footing — at least for now
2. Non-farm payrolls rose 196k m/o/m, above the expected 172k.
3. Unemployment rate remains unchanged at 3.8%.
4. Jobless claims fell 10k m/o/m, from 212k to 202k.
5. Business inventories rose 0.8% m/o/m, above the expected 0.5% increase.
6. Construction spending rose 1.0% m/o/m, beating the expected 0.2% decrease.

Negatives:

1. The Barr summary was a fiction; Emboldened Dems demand POTUS tax returns; this stuff is only going to get worse until 2020 elections.
2. ADP employment report shows an increase of 129k for March, below the expected 165k.
3. Job layoffs totaled 60,587 in March, greater than the Q4 monthly average.
4. Retail sales fell 0.2% m/o/m, missing the expected 0.3% increase.
5. PMI manufacturing index finished March at 52.4, below previous 53.0.
6. Durable goods orders fell 1.6% m/o/m, lower than previous 0.1% increase.

4-4-19 INVESTMENT SUCCESS SECRETS - A message from Consuelo - April 4, 2019

April 4, 2019

Dear WEALTHTRACK Subscriber,
 
We have an exclusive interview with great value investor and financial thought leader Joel Greenblatt this week. He is living proof that active management can still work really well.

Greenblatt is Managing Principal and Co-Chief Investment Officer of Gotham Asset Management which he founded in 2009 and where he co-manages hedge funds and several hedge fund-like mutual funds utilizing long/short strategies. His early claim to investment fame was at his predecessor firm, Gotham Capital where he co-managed an extremely concentrated hedge fund with 34% annualized returns over ten years before he closed it to outside investors because he realized its volatility was too difficult for even sophisticated investors to handle.

His behavioral insight that the best investment strategy is one that both makes sense and that you can stick with led to the creation of the Gotham Index Plus fund in 2015. Index Plus combines index investing tied to the S&P 500 with actively managed long/short strategies where the fund owns, goes long the S&P stocks selling at the biggest discount to Gotham’s estimate of their value, recently 262 of them, and sells short the companies Gotham estimates are trading at the greatest premium, recently 236 names.  Gotham Index Plus has beaten the market and its sizableMorningstar Large Cap Blend category by wide margins since inception.

The proposition that active management still works can be made on a case by case basis in the highly competitive stock mutual fund business, but it doesn’t hold up in general.  Morningstar’s latest Active/Passive Barometer report found that just 38% of active U.S. stock funds survived and outperformed their average passive peers in 2018, down from 46% in 2017.  Active value funds saw the biggest decline, with only 26% beating the passive value competition. The longer term record is even worse. Only 24% of all active funds topped their average passive rival over the 10-year period ending December 2018.

In Greenblatt’s opinion: the investment flows to passive will continue, but there is a silver lining to this trend, which he will explain.

In this week’s exclusive EXTRA feature, Greenblatt discusses why he is dedicated to disrupting  the public school system in New York City with charter schools so children from low income families can achieve at the same level as wealthier children.

If you are unable to join us for the show on television, you can watch it on our website over the weekend.  If you’d like to see it earlier, it is available to our PREMIUMsubscribers right now.

If you would prefer to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACK podcast on TuneIn, Stitcherand SoundCloud, as well as iTunes and Spotify.

Thank you for watching.  Have a great weekend and make the week ahead a profitable and a productive one.

Best regards,

Consuelo