A COLLECTION OF POSTS FROM KCR
Recommended for New Readers
Book Summaries
Andrei Shleifer’s Inefficient Markets: An Introduction to Behavioral Finance — KCR’s Key Lessons from a Legend in the Field
Many Academics believe in Market Inefficiency In 2000 Andrei Shleifer published “Inefficient Markets.” The book brings together some of the best research in Behavioral Finance. Dr. Shleifer’s “Acknowledgements” section ...
Bull Markets and their Consequences
A Short History of Financial Euphoria by John Kenneth Galbraith Introduction to an Investing Classic: John Kenneth Galbraith is an intellectual celebrity. As an economist, Harvard faculty member, and ...
Margin of Safety a Book by Seth Klarman
A Legendary Book with Timeless & Timely Lessons Introduction to an Investing Classic: “The truth is, I am pained by the disastrous investment results experienced by great numbers of ...
Market Anomalies
Survivorship Bias Free Stock Data is Critical to Investors
Before we show you how quality and reasonable valuations are the breeding grounds of greatness, let’s talk about a common analytical error. When analyzing stocks and investment strategies, using bias-free data is a basic and critical first step. For a beautiful explanation, we guide you to Teddy Koker, a researcher at MIT’s Lincoln Labs, elegant walk-through, complete with programming instructions. For those interested in a less complex example, this post is for you.
Quantamental Investing: A Brief Primer on KCR’s Toolkits
In our Chart for the Curious about Apple Computer, we document the challenges faced by investors who follow forecasters. For those seeking compelling evidence based on robust quantitative methods, please see our White Paper The Persistence of Profits. That piece builds on work done by a legendary professor of behavioral finance...
Glamour Stocks: Investing vs Gambling – 2021 Speculation in Review
2021 has been a terrific year for KCR. For like-minded investors who believe in buying high-quality companies at reasonable prices, 2021 was a much-needed reprieve. We would like to offer our deepest thanks to all of our subscribers and wish you a happy and healthy New Year!
10 Year Rolling Returns: A Warning?
*The chart shows the rolling 10-year period returns since 1800 *Where available we show the Shiller PE peak and trough valuations *The chart shows a reasonably consistent pattern of 10-year runs followed by dismal decades...
Inflation Assets Presentation Video, Slides & Transcript
Introduction Slide: Inflation Assets, Investing & Managing Equity Duration Note: Video Presentation is at the top of the transcript By way of preview I’m going to try and compress ...
Is Equity Beta Broken?
Beta, or the amount a stock price goes up and down relative to the market, is a popular measure of “risk” Famous investors such as Seth Klarman have observed ...
Macro Aware & The Need for KCR’s Equity Duration Tool
A Critical New Metric to Estimate Risk & Return: KCR does not make macro forecasts, but we are “macro aware” – inflation has never been more topical Our piece ...
Single Stock Ideas
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 the most respected names in behavioral finance, our models continue to advocate for select securities in both sectors. Our fundamental overlay continues to validate those findings.
Is EOG’s Stock Price Heading Higher?
Is EOG A Good Stock to Buy? The chart below shows the performance of natural gas and crude oil exploration and production firm EOG Resources over the last 3 years. Since the stock’s trough in October of 2020, it has risen over 250%, triggering behavioral errors that often give investors the feeling that they “missed” a stock after it rises that much.
Hillenbrand Investor Relations has an Incredible Story…
(And nobody is listening, hence the opportunity). Hillenbrand 60 Second Summary: • $3.5bn market cap • Double digit earnings growth • 2% dividend yield • Authorization to buy-back 10% of shares outstanding. • 11% FCF Yield so could buy that stock back from ongoing FCF • Founded in 1906 – longevity • If management just avoids making an expensive acquisition, this stock can deliver significant growth & cash returns to shareholders
Hillenbrand Stock Price = Capital Discipline for Cheap
• We have been proponents of investing in companies that make what you need, not what you want. • Behavioral errors often give investors the feeling that they “missed” a stock after it has risen • KCR believes that Hillenbrand lies at the intersection of two powerful themes we have highlighted: the opportunity in small-cap value stocks and finding growth at a reasonable price
AAP Stock Chart: Did You Miss a Profitable Secular Grower?
• The chart shows the performance of aftermarket automotive products supply and distribution firm Advanced Auto Parts, over the last 3 years • Since 2018 the stock has risen over 50% • We have been proponents of investing in companies that make what you need, not what you want, particularly in times like today, as explained in our...
SNAP Price Predictions: Are you an Investor or Speculator?
The chart shows the performance of social media company SNAP over the last three years • Since the stock’s most recent peak on August 31, 2021, it has stalled, falling -31% in a +2% tape...
Best Agriculture Stocks: Is CF Stock a Good Buy?
Looking at CF Industries Holdings’ stock price over the last three years. The chart shows the performance of fertilizer and agricultural chemical manufacturer CF, over the last three years Since ...
Twilio Investor Relations: A Tougher Job than Most
The chart shows the performance of internet infrastructure company TWLO over the last three years Since the stock’s most recent peak on March 1, 2021, it has stalled, falling ...
Is DVN’s Stock Price Today an Opportunity?
The case for undervalued energy, looking at Devon Energy over the last three years. The chart shows the performance of oil and gas exploration company DVN over the last three ...
