To mark Enterprising Investor’s 10th anniversary, we have compiled retrospectives of our coverage of the most hair-trigger themes in finance and investing over the last decade.
Dow 36,000, crypto, Brexit, GameStop, pandemic.
Imagine you uttered these terms when in the storing of 2011, when Enterprising Investor first launched. What would they have evoked for you and your audience?
Now, fast-forward 10 years and compare what they meant then with what they midpoint to us today.
It is a variegated world, isn’t it?
This time a decade ago, the Dow Jones Industrial Average hovered in the 11,000s. Four years removed from the worst financial slipperiness in generations, it had yet to recoup its pre-crisis highwater mark. The bullish 1999 prediction of James K. Glassman and Kevin A. Hassett sounded as farfetched then as it did when the tech rainbow splash in the early aughts.
Inflation, meanwhile, was whimsically a rationalization for concern, surely not with near-zero interest rates. Despite rampant monetary stimulus, deflation was in many respects the worthier worry.
And what well-nigh crypto? Aside from bitcoin, the crypto market was an empty canvas, still increasingly the realm of science fiction than very investment products. Certainly, had you forecasted bitcoin eclipsing a $1 trillion market cap or exceeding $65,000 a pop, you’d have raised a few eyebrows. Same if you had suggested that bitcoin mining would someday match the energy usage of unshortened countries.
And it’s a pearly bet that the portmanteau Brexit would have registered a few “Huhs?” as well. The United Kingdom’s unfurled membership in the European Union was something no one had much reason to doubt. To be sure, no referendum had been scheduled, and plane if one had, few would have given it much endangerment of waffly the status quo. Eurosceptics were to be found wideness the UK political spectrum, but whether Tory or Labour, they tended to be confined, if not to the fringes, at least to the margins. Amid the European sovereign debt crisis, Grexit, or Greece’s exit from the EU, seemed a much likelier scenario in those days.
As for GameStop, it was then what it is now: A mall store that sells videogames. “Retail apocalypse” had not yet entered worldwide parlance, but tween the sputtering recovery that followed the Great Recession, GameStop whimsically looked like a growth stock. There was nothing in its orchestration then to suggest it would warrant a $15 billion market cap, and no reviewer could have predicted it would wilt the fundamentals-immaterial poster child of the meme stock phenomenon.
And as for “pandemic,” certainly COVID-19 was not on anybody’s radar in those days. And while older outbreaks of SARS and H1N1 had caused global snooping and hinted at the underlying threat, their scale was thankfully small and their impact limited. Few living had any wits with the sort of massive worldwide outbreak that would tropical borders, lock lanugo the planet, and incur such a terrible toll in human lives.
Yet here we are today. The Dow has breached that 36,000 ceiling. Inflation, unseeded for a generation, has jumped to unfamiliar heights. Crypto’s total market cap stands at virtually $3 trillion plane if skeptics summate its intrinsic value at exactly 0. Fueled by its own incarnation of a populist political trend that has swept much of the world, the UK has executed a somewhat messy divorce from the EU. GameStop has soared to illogical heights and has yet to return to earth, propelled by a revolt of the meals in the retail market, the ramifications of which will likely reverberate for years to come. And increasingly than 18 months into the COVID-19 pandemic, our lives are incomparably different. When it comes to the nature of work, decades of transpiration have been compressed into a year and a half.
Prediction: The Future Will Be Different
It’s an old saw in finance that there are only two kinds of forecasts: the lucky and the wrong. And no one scanning the market landscape in 2011 could have predictable the upturned gyrations of the last 18 month, let vacated the frenetic developments — the shocks, panics, taper tantrums, and wink crashes — of the last 10 years. There was no predicting how much would transpiration or how much wouldn’t.
At Enterprising Investor, we’ve published many forecasts and perspectives in our 10-year history. Some were extremely prescient. Many were not. But the lesson that underlies all these efforts is that while wringer may not unchangingly yield lulu returns for our own or our clients’ portfolios, the process itself will nevertheless serve us well. And like the time value of money, the longer we pension at it, the greater the compounding benefits will be.
Acquiring skills and expertise, reading and consulting widely, developing theses and testing them, indulging our curiosities, and unchangingly keeping our vision on what’s directly in front of us as well as what’s on the horizon will requite us a largest understanding of ourselves, the markets, and each other. And that will pay dividends whether or not they’re of the financial variety.
With that in mind, unelevated is a curated selection of some of our most popular and time-tested content. These selections illuminate many of the key themes of the last 10 years while moreover offering compelling lessons on how to approach, understand, and succeed in the world of finance and investing.
With our first decade overdue us, we squint forward to bringing you increasingly and largest insights in the months and years superiority and invite you to join our polity as a subscriber and to consider sharing your own research and perspectives as an Enterprising Investor contributor.
“A portfolio manager once told me that half the research on my sedentary was a well-constructed waste of time,” Robert J. Martorana, CFA, writes. “‘Figure out which half is garbage and you’ve just doubled your productivity,’ he advised.” With this lesson in mind, Martorana ripened the How to Read Financial News series to help investment professionals optimize their reading and largest distinguish the narrative from the noise.
What can you do to modernize your chances of getting hired as a research analyst? Jason Voss, CFA, outlines a number of steps that aspiring analysts can take.
Where do investment ideas come from? Joachim Klement, CFA, shares his process and outlines several key steps.
“Institutional investors are characterized as ‘big fish’ and ‘smart money,’ but what else are they?” Thomas Brigandi, CFA, and Sloane Ortel ask. The two go on to explore the seven major types of windfall owners and the motivations that are driving them.
What skills does an reviewer need to wilt a portfolio manager? According to Dato’ Seri Cheah Cheng Hye, there are seven steps they need to master. Larry Cao, CFA, explains.
Intangible resources are increasingly hair-trigger to corporate value, and new valuation methods need to be deployed to virtuously summate their worth. Antonella Puca, CFA, CIPM, CPA, and Mark L. Zyla, CFA, CPA/ABV, ASA, explore some of the increasingly incisive valuation techniques.
After some bad formative experiences with horrible and ineffective bosses, Barbara Stewart, CFA, came to the conclusion, rightly or wrongly, that she would have to behave like a wiggle to get superiority in a traditional organization. She made a visualization to “lead herself” and hasn’t looked back. She believes that this sort of self-leadership may wilt the most important kind of leadership of all.
How can you take wholesomeness of the current moment to whop your career? Eric Sim, CFA, shares his translating on how to build and leverage your social capital.
What are two of the most important things an investor needs to do to succeed? Manage risk and know where we are in the market cycle, says Howard Marks, CFA. Lauren Foster considers his perspective.
“If you squint at the joint vestige wideness acquisitions,” Aswath Damodaran said, “this is the most value treasonous whoopee a visitor can take.” Paul McCaffrey examines Damodaran’s reasoning.
Why do the benchmark indices in India and the United States walkout completely opposite trends relative to GDP growth? Saurabh Mukherjea, CFA, shares his analysis.
Could the predictive models have predictable NMC Health’s earnings manipulation and bankruptcy risk? Binod Shankar, CFA, crunches the numbers.
Central Bank of Brazil governor Roberto Campos Neto, CFA, explains the monetary policy response to the COVID-19 slipperiness in an interview with Marg Franklin, CFA.
In whose interest should companies be run? “I think ’What should companies maximize?’ is the most important question we squatter in modern capitalist economies today,” Luigi Zingales explained. Julie Hammond, CFA, CPA, discusses his analysis.
When it comes to the nomination between zippy and passive, investors have at least three questions to consider, Hansi Mehrotra, CFA, explains.
The golden age of stock-still income is over, Mark Armbruster, CFA, writes. That ways we have to rethink portfolio management and risk control.
As the population ages, who will be left to buy stocks? Nicolas Rabener gives his analysis. His conclusion? “Like passengers on the sinking Titanic, investors have no place to hibernate and no unscratched harbor from which to wait this out.”
“Life is risk. We adapt, innovate, and make intelligent trade-offs to go forward,” Laurence B. Siegel and Stephen C. Sexauer write. “We manage risk, considering we cannot live risk-free, plane if we wanted to. In fact, to transpiration is to take risks, and all economic progress comes from change.”
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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