White Papers

April 14, 2020

The Refinancing Wall Looms Large: When Algebra & Optimism Collide

September 21, 2023|

In our August piece, The Solvency Debate Continues, KCR updated our 2021 missive Junk Stocks Funded by Junk Bonds. We observed that 2023 had seen speculators return with a ferocious appetite for low-quality stocks. Our focus in that piece, and again today, will be on a group of companies that failed the Federal Reserve’s test for financial fragility as defined by interest coverage ratios (“ICRs”).

Equal Weight S&P 500 Indexes: A Panacea for Concentration Risk?

September 7, 2023|

KCR has written a blizzard of material on the increasingly dire investment implications of market capitalization weighted index funds due to the outsized performance of large stocks that now sit at brutally high multiples. This is hardly a new topic for us. In 2014, as “smart beta” strategies became wildly popular, we penned Indexing Dilemmas, which laid out the following facts:

AI, Oil and Gas: Misadventures in Capital Allocation

July 6, 2023|

Our recent pieces, How to Value Tech Companies and External Obsolescence: Tech Investors’ Newest Nightmare?, discussed how AI algorithms, big data, and machine learning could be undermining the moats of tech stocks that now sport multiples last seen during the dot.com mania. We noted that our empirically

Mega Cap Stocks: Making Money in Large Cap Growth

June 2, 2023|

“Didn’t we just learn that pouring trillions of dollars into technologies with uncertain profit profiles we didn’t fully understand was a bad idea? Tech investors seem to be most aggressive when they have the least visibility on the IP and valuation provides them with no margin of safety.” -Zac M., KCR Subscriber After the entirely predictable and crushing losses in novelty tech stocks and the collapse of the market’s leaders post the Covid peaks, both groups are ripping in 2023.

The Art of Stock Picking Returns

February 23, 2023|

“We’ve had 40+ years where all the money went into broadband, or internet, or Netflix or the cloud and no money went into basic productive capacity…” -Robert Friedland, CEO, Ivanhoe group of companies “During the latter stage of the bull market in 1929, the public acquired a completely different attitude towards