Articles

Articles Written by Validea Founder John Reese

2/5/2018

John Reese NASDAQ Articles
NASDAQ.com

Capitalize on Global Growth with These Five High Scoring Industrials

Global economic growth is surging, and many analysts contend that global equity markets are in for a strong 2018. For investors wanting to participate in the continuing bull market, overseas stocks are generally offering a better value than their U.S. counterparts, and might represent a good alternative if economic growth continues. Factories across the globe are running near full capacity-Chinese industrial utilization rates reached 78% in the fourth quarter of 2017, the highest level since 2011.

1/31/2018

John Reese Globe and Mail Articles
The Globe and Mail

Eight Deep-Value Stocks That Look Particularly Attractive as Interest Rates Rise

It's certainly been one long decade for value investors. This year had promised to see a reversal of years of underperformance, but at least so far, that hasn't happened. Is there still hope that conditions may finally be turning? Yes, this has been said before only to be proved wrong. Many expected the turn to come in 2015 and again in 2016, and for a while, it appeared it might have finally done so. But the market roared last year on the expectation of lower regulation and tax cuts, negating any momentum value might have gained.

1/30/2018

John Reese Forbes Articles
Forbes

Winning In The Market With The Patience Of The Wright Brothers And Warren Buffett

Patience is a firm requirement if you want to succeed at just about anything, and investing is no exception. But suppose you are working toward an investment goal that you're certain will lead to significant, possibly even game-changing gains over the long term, yet there is no immediate gratification or validation in sight? Would you have the patience to stick to your guns? This might be an interesting question to pose to the Wright brothers, who ushered in the age of aviation in 1903 after years of building printing presses and bicycles. Their first glider, which they tested in 1900, was a bust, but they kept their noses to the grindstone by constructing a wind tunnel to test nearly 200 wings and airframes of different shapes and designs.

1/16/2018

John Reese NASDAQ Articles
NASDAQ.com

A Momentum Model with Fundamentals Behind It

The stock market's sustained bull run is a reminder that momentum as an investing strategy can work well. While it may resemble performance chasing, buying stocks that have been performing well based on the assumption that they will continue to do so is more akin to banking on the emotional and irrational reactions of performance chasers by systematically identifying and buying shares that are on the rise. Momentum investors, while gravitating toward well-performing stocks, are doing so in; (1) a rule-based manner with entry and exit plans in place, and (2) with a view toward the short- and intermediate- term, rather than the long-term view of value investors.

1/11/2018

John Reese Forbes Articles
Forbes

Investment Ideas For Rebalancing Value And Growth Portfolios

There are hundreds of articles, blogs and videos sprawled across the Internet full of advice for the new year and checklists regarding what you should do with respect to your investments. So, let's part with tradition and focus on something that you should not do: Make investment decisions based on emotion. Investors can become swayed by media hype about a stock and coaxed into buying or, conversely, become panicked by bad press and sell a stock prematurely.

1/3/2018

John Reese NASDAQ Articles
NASDAQ.com

Home Improvement Picks that Could Perk Up a Portfolio

Whether or not you believe the new tax legislation is going to put more money in your pocket, economic indicators are pointing to continued growth in 2018. Most asset classes performed well in 2017, with many delivering double-digit returns, and the retail sector was no exception. Within this sector, the home improvement industry may be poised for a good year ahead, and investors might want to take a look at some opportunities there. In November, U.S. retail sales growth of 0.8 outpaced expectations (the consensus was for 0.3 percent growth). Home improvement is anticipating an uptick in growth over the coming year, according to the North American Retail Hardware Association's 2017 Market Measure report: "After all, this year has seen strong performance in the housing sector, lower unemployment, an energized stock market, a relaxation of lending restrictions and a consumer base with no shortage of home improvement ideas."

1/1/2018

John Reese Globe and Mail Articles
The Globe and Mail

Why Patience Can Often Lead to the Best Returns From Investment Managers

When it comes to picking an investment manager, it's hard to say what attribute is more important, luck or skill. A manager's track record often is not long enough to make the call on skill, and even if the work history does span decades, research has shown managers for the most part have a tough time beating the indexes consistently over a long period of time. Even the best managers underperform for a period of time, something I've written about in previous columns. Investors are flawed when it comes to choosing individual stocks or fund managers. We tend to overestimate our own decision-making abilities and defend our choices even if they turn out to be the wrong ones.

12/26/2017

John Reese Globe and Mail Articles
The Globe and Mail

Big U.S. Money Managers Signal a Shift in Tides

It's going to be hard to beat this year's nearly 20-per-cent gain in the S&P 500, and most experts are warning investors to temper their expectations over the next few years. Sure, there's a good chance stocks continue to rise because of strong corporate profits and impending tax cuts. Global economies, including that of the United States, are expanding and corporations are sitting on mountains of cash to invest or return to shareholders. These catalysts aren't going to disappear when the ball drops at midnight on New Year's, but some big money managers are cautioning that markets simply can't continue to keep the same pace.

12/20/2017

John Reese Forbes Articles
Forbes

10 Chinese Stocks For Alpha Seekers

Whether or not you're a bull in the China market, it's hard to ignore that it has been one of the best performers this year. Besides housing one of the world's largest bitcoin "mines," China is home to approximately 350 million middle-class consumers that are experiencing growing levels of wealth and an improved quality of life. The government continues to transition from a manufacturing-based to a service-based economy, with an increased focus on digital innovation serving as a major influence on consumer trends.

12/19/2017

John Reese Forbes Articles
Forbes

18 Potential Stock Winners From Tax Reform

The tax man cometh, and he's wearing a red suit. As it continues along its path through Congress, the tax reform bill is ushering in a kinder, gentler environment for many businesses in 2018. The proposed reduction of the corporate tax rate from 35% to 20% (or perhaps 21%, depending on how continued negotiations go) will certainly offer a welcome reprieve for a variety of businesses.

12/11/2017

John Reese NASDAQ Articles
NASDAQ.com

Surprise, Surprise: No Strategy Works All The Time

Since 2003, I've been running a series of investing models inspired by great investors and successful strategies. One of the most prominent lessons I've learned over the years is that these models can surprise me, both on the upside and the downside. Since their performance in any given year also reflects investors' appetite for certain types of stocks and styles, I thought it might be both an interesting and enlightening exercise to review these models - which cover a vast set of investing approaches -and see what we might glean from their track records.

12/5/2017

John Reese NASDAQ Articles
NASDAQ.com

Looking for Top Stocks in the Strongest Performing Sectors

As discussions concerning the ever-rising stock market continue to flourish, so do opinions and observations about how the tech sector is generating most of the gains. It stands to reason, given that the tech behemoths have enjoyed such dramatic growth and are so heavily weighted in the S&P 500. But while the tech sector continues to reign supreme on the performance front, 2017 has been a good year for several sectors.

11/27/2017

John Reese Forbes Articles
Forbes

Four 'Cornerstone' Growth And Value Stock Buys

Being a successful active investor requires focusing first on process, then on results, according to famed investor James O'Shaughnessy. In a recent Bloomberg Radio interview, the message was driven home by O'Shaughnessy Asset Management's Senior Portfolio Manager, Chris Meredith. While the firm is dedicated to building sound investment processes, Meredith said, it has also come to realize the importance of educating investors on how to do the same-another priority of the firm's founder.

11/14/2017

John Reese Forbes Articles
Forbes

M&A Activity Growing, What Stocks Would Benefit Most?

The stock market may be eerily calm in terms of volatility, but merger and acquisition activity has been bubbling up over the past year, more so than in the first year of any other modern president's term. Thomson Reuters data shows that U.S. merger and acquisition transactions totaled $1.2 trillion since Trump was elected, stemming from nearly 12,700 deals-the Broadcom-Qualcomm and Disney-21st Century Fox talks being two of the more recent.

11/14/2017

John Reese Globe and Mail Articles
The Globe and Mail

Three Stocks From Different Sectors That Could Provide Value For Investors

Some prominent professional investors have been talking about the difficulty of finding value stocks in a market that seems to go nowhere but up. Even Warren Buffett's Berkshire Hathaway is sitting on $100-billion (U.S.) of cash looking for places to invest. After losing out on a hot trade in the energy sector this summer, his biggest deal so far this fall has been to take a private stake in Pilot Flying J, the largest truck stop operator in the United States. The deal isn't going to go far to solve the billionaire's dilemma. He has so much cash to put to work he needs a big transaction or two to really move the numbers.

11/2/2017

John Reese Globe and Mail Articles
The Globe and Mail

The Contrarian View on Dividend-Paying Stocks

Investors tend to view companies that pay dividends as boring, but reliable, stewards of shareholder capital, but there are a variety of reasons why these payouts aren't necessarily the best sign of a strong company. Dividends and stock buybacks have been the staple demands of activist investors in the past few years as they push company managers to unlock more value for shareholders. These are often vulnerable managers who have been struggling to unlock growth.

10/30/2017

John Reese NASDAQ Articles
NASDAQ.com

Scary Stocks Could Present Contrarian Investor Opportunities

There doesn't seem to be much that's spooking investors these days. Ever-rising geo-political tensions loom over a roiling White House and stymied Congress. Yet, the markets remain eerily calm. Volatility continues to be low and consumer sentiment is high. The market is widely considered to be pricey, but the extended bull market seems to be keeping investors pretty upbeat.

10/30/2017

John Reese Forbes Articles
Forbes

The Downside Of Dividend Paying Stocks

Investors view dividend-paying stocks as a reliable way to collect income from their portfolios without being forced to sell shares, and dividend-paying companies as reliable stewards of shareholder capital. While this can be true, the dividend stock landscape has changed somewhat, and investors should consider a variety of factors when hunting for returns.

10/18/2017

John Reese Globe and Mail Articles
The Globe and Mail

Three Value Stock Picks From the Worst-Performing Sectors

If global economic growth predictions come true, stocks could continue their climb into the stratosphere. It almost seems impossible at this point, but every day there are signs this bull still has room to run, despite a steady drumbeat of warnings that it is about to end and Thursday's ominous 30-year anniversary of the 1987 crash. Around the world, central banks are shifting gears on easier money policies that were needed during the financial crisis and its aftermath but are no longer as necessary. This is happening as economic output begins to climb, a sure sign of growth. And the promise of government spending and corporate tax cuts in the United States, combined with strong earnings reports, has lifted shares this year.

10/11/2017

John Reese TheStreet.com Articles
TheStreet.com

Why Doesn't Berkshire Just Buy More Apple?

Berkshire Hathaway (BRK.A) (BRK.B) still has a hefty wad of cash in its pocket (nearly $100 billion at the close of the second quarter), and Warren Buffett continues his search for ways to spend it. Last week, Berkshire Hathaway announced a deal to purchase around 40% of Pilot Travel Centers LLC -- one of the largest private companies in the U.S. and operator of Pilot and Flying J travel centers -- for an undisclosed amount. The Wall Street Journal called the deal "Berkshire's latest wager on traditional forms of transportation and U.S. economic growth." This on the heels of the summer's foiled plan to purchase power-transmission company Oncor for $9 billion (Sempra Energy swooped in with a higher bid). Earlier in the year, the $15 billion Berkshire committed for Kraft-Heinz's (KHC) purchase of Unilever (UN) unraveled. But Buffett isn't giving up.

10/10/2017

John Reese Forbes Articles
Forbes

6 Stocks That Fit Ken Fisher's Out Of the Box Selection Criteria

We all know that money doesn't grow on trees. But for billionaire investing giant Kenneth Fisher, they may be kissing-cousins. Before founding Fisher Investments, one of the largest money management firms in the world (overseeing about $90 billion in assets), a young Ken Fisher set out to study forestry at Humboldt University, but instead graduating in 1972 with a degree in economics. From 1984 to 2017, Fisher also wrote a column for Forbes magazine titled "Portfolio Strategy" (making him the longest continuously-running columnist in the magazine's history).

10/9/2017

John Reese Globe and Mail Articles
The Globe and Mail

Three Stocks to Watch For Investors Awaiting Value's Return

Technology stocks commanded the headlines this year until September, when out-of-favour stocks in the financial and health-care sectors heated up and people started talking about the return of the reflation trade. You may remember this from late last year, when investors were betting on deregulation and infrastructure spending to fuel global growth, egged on by central banks. The idea lost momentum in the spring, when the promised changes didn't happen immediately, but new talk about tax cuts in Washington has breathed new life into the trade. Some strategists are betting on a turning point.

10/3/2017

John Reese Forbes Articles
Forbes

10 'Magic Formula' Stocks Market Guru Joel Greenblatt Would Love

Market pundits come in all shapes and sizes and tout a wide range of strategies for analyzing stocks. In his bestselling 2005 book, The Little Book That Beats the Market, market guru Joel Greenblatt showed readers how to identify good companies selling for bargain prices using a "Magic Formula" of only two criteria--return-on-capital and earnings yield. Greenblatt, co-founder and chief investment officer of Gotham Asset Management, created his one-two stock analysis punch by weaving together concepts of two of the greatest investors of all time: Warren Buffett and Benjamin Graham.

10/3/2017

John Reese TheStreet.com Articles
TheStreet.com

Search For Deep Value, Not Flashy Overbought Stocks

Investors seem complacent about this long bull-run market, lulled by low volatility and major indexes that continue their climb upward seemingly impervious to news. Some have argued that stocks are too expensive, especially the handful of big technology companies that are dominating headlines lately and driving the indexes higher. The contrarian investor David Dreman, author of "Contrarian Investment Strategies: The Psychological Edge," says investors give high-flying glamour stocks -- which tend to include tech stocks -- too much attention. They allow emotion to overvalue these stocks and ignore or overlook cheaply priced stocks of companies that may be going through some short-term but fixable problems.

9/26/2017

John Reese Globe and Mail Articles
The Globe and Mail

How Warren Buffett Uses Numbers to Gauge a Stock's Qualitative Strengths

Warren Buffett continues to feel the weight of nearly $100-billion (U.S.) in cash on Berkshire Hathaway's balance sheet - not an ideal situation for a guy who always wants dollars to be working for the shareholders. But this legendary investor didn't get to where he is by acting hastily or impulsively. He has made a long and successful career of looking before he leaps. What exactly does "looking" involve for Warren Buffett, arguably the most famous investor of all time?