Large Cap Growth Index Funds & the Path to Poverty
A Quick Peek at the Russell Large Cap Growth Index - Understandably smitten with low fees and a long bull market, index fund promoters appear to have the data on their side. A collection of financial heretics, the authors of this investment newsletter have highlighted what we believe are the defects endemic to index funds today. In the interest of simplicity, we have used single factors to highlight just how these...
S&P 500 Calculator: Warren Buffett Valuation Spreadsheet
This Tool Can Bring Calm to Chaos - Reverse inquiries looking for our Buffett 10-Year Returns Estimation Tool suggested another post was in order. We’ll explain where the tool came from, how to use it and why it is so important.
S&P Energy ETF vs. Apple
The Case for Investing in What you Need vs. What you Want Made Simple - Since 2020, this newsletter has used historical data to explain the case for investing in companies that make what you need while shelling overpriced companies that make what you want. KCR’s research has demonstrated that the market’s valuation structure has, and continues to, favor firms that provide popular discretionary goods and novelty technologies over companies that make essentials to human life.
Nabors Investor Relations Has a Terrific Story to Tell
Profiting from the Reckoning with Reality - KCR readers know we have been long-term bulls on energy stocks and have relentlessly panned the high-priced promises of so-called clean-tech energy stocks. While others read the IEAs’ path to net-zero emissions and forecasted the end of oil, we read the work and wrote our piece, Net Zero Emissions: The Possible vs. the Plausible, which explained how their...
Large Cap Core Funds: Growth Funds in Hiding?
US Large Cap Core Funds: Historical Weights at Various Levels of Valuations - To summarize, historically, investors in large cap core index funds had the bulk of their money invested in stocks with reasonable valuations with negligible exposure to stocks valued over 10x price to sales.
“Enroned” an Update On High Prices & Low Quality Stocks
The phrase “I got Enroned” has entered the investing lexicon recently. KCR believes the term is slang to describe the losses being incurred by investors in stocks with indefensible valuations and low-quality accounting. This piece updates our January work identifying the stocks most like Enron today.
MO Stock PE Ratio Offers Cash Backed Income
Beginning in March of 2021, KCR’s quantitative research has provided consistent evidence that Staples and Energy stocks present investors with the opportunity to buy companies of high quality for unusually low prices. Subsequent to our evidence-based models’ endorsement, we engaged in a fundamental review of both sectors and the specific stocks our models favored. Steeped in academic research done by...
Asset Allocation in Bear Markets
Asset Allocators & The Need for Discipline - The chart below shows the compound return spread from investing in the Russell 1000 Growth Index less an equal investment in the Russell 1000 Value Index.
Carvana Investor Relations: A Tough Slog Ahead?
First, an important note: We have no beneficial interest for or against Carvana. Carvana has been panned by us here, here, and here, by Grant’s Interest Rate Observer, Seeking Alpha, Medium and by numerous other skilled and historically informed investors. On January 7th of this year, Carvana was the lead out stock in our “Enron look-alikes” list based on a proprietary KCR screen designed to….identify Enrons.
Vanguard Small Cap Index Fund: The Myth of Low Cost Indexing
A warning to long-time readers: we are about to agree with Elon Musk and Cathie Woods on something. They have come out against index funds due to the belief that they deprive investors of winners like Tesla (Ms. Woods) and that they have too much voting power (Mr. Musk).
SBC Finance: An Update on the Absurd
The Real Cost of Stock Based Compensation Expense -- Stock Based Compensation (“SBC”) doesn’t matter for investors (and employees/employers) until it is ALL that matters.
Anatomy of a Bear Market: Violent Volatility
A Quick Review of Equity Market Declines Post Bubble Peaks - Brutal end to Q1 for investors who buy cheap stocks, quality stocks, or some mix of the two. Quick review.
