Marketplace Roundtable

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Marketplace Roundtable #72: The Data-Driven Approach To Finding Investment Ideas, With Andres Cardenal Feb 25, 2020

Show notes

Andres Cardenal rejoins the Seeking Alpha Marketplace Roundtable podcast to discuss his investment strategy as featured in the Data Driven Investor research service.
Cardenal, who has been investing since 2002, uses a combination of quantitative and qualitative methods. He finds that the quality of a company's management team to be one metric that can be particularly telling. Recently this led him to pen a bullish thesis on Uber (UBER). "Management is explicitly saying that they are accelerating the profitability targets," he says. "I wouldn't be surprised to see the company make big improvements over coming quarters."
Cardenal also pays close attention to macro variables. Here he views the environment as relatively benign. China is "a big piece of the puzzle" however. The country was hurt by the trade war last year and is now reeling from the coronavirus. This provides an excuse to the People's Bank of China and other central banks to pump more liquidity into markets. "This could be a game changer, on a number of sectors," says Cardenal.
These comments came before the latest sell-off in equity markets, as the podcast was recorded on Feb. 19.
Topics Covered:
1:45 minute mark - Investing strategy
2:45 - Something you've learned over time
4:30 - Discussion of bullish call on Uber (UBER)
7:00 - How does the current market compare to previous markets and what's something you've learned over the past year?
8:45 - How much attention do you pay to macro variables?
10:15 - What are you watching at this point?
12:00 - Are you concerned about a broader slow down in China?
13:00 - Are you looking at any stocks in particular regarding China? (BABA)
14:30 - Something that scares you about the markets.
16:00 - What will be the effect of negative interest rates?
19:30 - What is something that gives you confidence in your approach?
20:30 - Favorite ideas
25:00 - Discussion of AYX
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Marketplace Roundtable #71: Dane Bowler On Finding REITs For Retirement Feb 19, 2020

Show notes

Dane Bowler of the newly launched Retirement Income Solutions joins the Marketplace Roundtable. He shares his investing journey and how it brought him to real estate investment trusts (REITs), as well as some of his favorite ideas in today's market.
Topics Covered
2:00 minute mark - Talk about your investing goals and style
3:30 - Why REITs?
5:00 - What's your process for choosing an investment?
6:00 - Lessons learned
7:15 - Something new learned in the markets
9:45 - What themes are you paying attention to now in REIT sectors?
12:45 - Something that scares you about the market
14:30 - Something that gives you confidence in your approach
15:30 - Favorite ideas (MPW) (GNL)
22:15 - Any bargains in the mall REIT sector?
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Marketplace Roundtable #70: What To Look For In Auto And Transportation, With Doron Levin Feb 10, 2020

Show notes

Doron Levin joins the Marketplace Roundtable podcast to discuss his views on the transportation sector and picks for 2020 as featured in his Auto/Mobility Investors research service.
Levin is a longtime journalist covering the auto and transportation sector. Based in Detroit, he focuses on the global automobile "plus mobility" industry. This includes not just cars and automotive suppliers, but "the idea that personal transportation is changing its nature." It's not just about car ownership, in fact many people may not even want to own a car at all.
"We're really moving to an autonomous future where cars I believe will drive themselves and of course all of this will change the investment picture in the automobile and mobility sector," says Levin. This begs the question: How close are we to fully autonomous vehicles? Nobody knows for sure, but advances are being made all the time. Companies to watch are often outside the automobile sector, including Google (GOOG, GOOGL), and Intel (INTC) that recently acquired a company called Mobileye. Many are startups.
When it comes to "traditional" auto stocks, Levin likes Hyundai Motor Corp. (HYMLF) and is bearish on Nissan Motor Co. (NSANY).
Topics Covered
1:45 - Background, specifically regarding the auto sector.
5:00 - How close are we to having autonomous vehicles?
8:15 - How does this translate into picking stocks in the auto sector?
11:45 - The future of individual car ownership
16:45 - Short term issues in the auto sector
19:15 - What concerns you?
21:45 - Something that gives you confidence
25:00 - Favorite picks (HYMLF) (INTC) and companies to avoid (NSANY) (RNSDF)
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Marketplace Roundtable #69: 2020 Commodities Outlook With Andrew Hecht Feb 03, 2020

Show notes

Andrew Hecht rejoins the Marketplace Roundtable podcast to discuss his views on the commodity sector and picks for 2020 as featured in the Hecht Commodity Report research service.
Hecht is bullish on all commodities. "We're seeing a little bit of a pullback in some of the leading commodities, which I think is a buying opportunity," he says. Asked to name favorites, he identifies precious metals and oil, which "is getting to the point where it's back in the buy zone." Oil equities, too, "offer tremendous value in a market that's almost devoid of value."
2020 should be a volatile year: "A nightmare for investors, but a paradise for nimble traders with their fingers on the pulse of markets." To pick spots, Hecht looks at open interest and commitment of trader reports, and technicals such as open interest and volume, among others.
The coronavirus is certainly a concern for the short term, especially considering that China is the world's largest purchaser of commodities and primary driver of demand for raw materials. Eventually this could be a buying opportunity for commodity investors as secular Chinese demand is ultimately not going anywhere.
Topics Covered:
2:30 - Investing strategy
3:45 - Favorite commodities
5:00 - How do you time long vs short?
6:00 - Is the Coronavirus having any impact on your views?
9:00 - What's the effect on equities?
10:45 - How much diversity is there in commodities?
14:00 - What's your background story... how did you get into investing?
18:45 - Macro view
22:00 - Views on Gold
24:00 - Are any currencies immune to devaluation?
25:00 - Buying opportunities (FCX) (OIH)
29:15 - Positioning portfolio in light of the upcoming election
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Marketplace Roundtable #68: The Next Really Big Thing With Cody Willard Jan 27, 2020

Show notes

We share an interview from Alpha Trader with Cody Willard, author of Trading With Cody on the Seeking Alpha Marketplace.
The episode begins with a discussion of Tesla (TSLA), and Willard - who was a longtime bear on the company (but never short) - began buying close to last year's lows alongside the introduction of the Model 3. Making him even more bullish was the unveiling of the cybertruck. Willard believes every car on the planet over the next five-to-ten years is going to be using some version of the cybertruck's exoskeleton.
It's hard to find hated names in today's one-way stock market, so Willard - strongly bullish long-term - has been doing some trimming around a few long-held positions. "Feet to fire" though, Willard's favorite five stocks are Disney (DIS), Virgin Galactic (SPCE), Spotify (SPOT), Qualcomm (QCOM), and Cisco (CSCO), and Willard spends some time explaining why he's a fan of the companies. Task notes that Cisco kind of deserves the hated name moniker - after all it's down nearly 20% from since mid-summer 2019.
It's the truly revolutionary ideas and industries where we can find future 100- or even 1,000-baggers, says Willard, and space exploration has the potential to be the largest such revolution ever. People are spending too much time worrying about what demand might be for Virgin Galactic's $250K space flights, and not nearly enough time appreciating the technologies that will arise from such activity. Publicly-traded pure plays for space are tough to find beyond SPCE, but Willard is also an owner Aerojet Rocketdyne Holdings (AJRD) and Boeing (BA) on the space idea. He's also an investor in privately-help SpaceX (SPACE).
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Marketplace Roundtable #67: The Importance Of Optimism And 'Unscaling' In Growth Investing with From Growth To Value Jan 21, 2020

Show notes

Kris joins the podcast to discuss the From Growth to Value research service featuring the Potential Multibaggers.
As the name suggests, Kris's research looks at both growth and value, but these lines often blur. The importance for investors is not so much labels but finding a style that one is comfortable with.
"I was actually more of a value investor at first but I found that it didn't fit my personality," he says. "My strategy is actually based on optimism." People get distracted by bad news and by "everything that could go wrong."
Thus the focus on the winners, and finding the "multibagger" that can produce outsized returns over the long term. "If you have even one multibagger in your portfolio, then your portfolio is going to do a lot better than any benchmark."
It starts with focusing on the good things, on companies that can grow very quickly. Right now the principle of "unscaling," where services become more individualized, is an emerging trend. This can be seen with a company like Shopify (SHOP), Trade Desk (TTD), or Square (SQ) but also with clothing retailers and drugmakers.
Topics Covered
2:15 minute mark - What's your investing strategy?
10:00 - What's your process for narrowing down the choices?
12:30 - Background as an investor and how you started doing this.
14:30 - Anything learned over the past year?
17:45 - What is something that concerns you about the markets?
20:15 - What are you most excited about right now?
25:30 - Other companies besides SHOP that are "unscaling".
27:45 - Favorite ideas.
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Marketplace Roundtable #66: Akram's Razor On A Secretly Choppy Trading Environment Jan 13, 2020

Show notes

We feature an episode from The Razor's Edge for this week's Marketplace Roundtable, featuring Marketplace author Akram's Razor as well as Seeking Alpha's Daniel Shvartsman.
The market has seemed to be on an up and to the right path, but underneath there's been a surprising amount of churn. Large-cap growth stocks especially have moved suddenly on unclear reasoning, moves that seem skittish amidst a bull market. This may just be a sign of late-cycle behavior, or it may be a source of opportunity for the nimbly patient investor. We discuss several tech stocks and provide examples of what is going on.
Topics Covered
2:30 minute mark - Setting the scene on this market
11:15 - The whiplash effect and how this affects relative valuation
13:45 - Is long term investing in trouble?
18:00 - ZOOM, WORK, DBX as long-term examples of this phenomenon
28:30 - Finding the right pair trade... harder in this market?
35:30 - The general risk climate in the market
49:30 - Apple (AAPL) and 5G
54:45 - Given the issues, how are you going to trade for the year?
1:00:30 - Streaming vs. SaaS in terms of valuation
1:09:30 - Will there be a rush back into growth stocks in 2020?
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Marketplace Roundtable #65: Michael Gayed On The Coming Reflation Jan 06, 2020

Show notes

This week’s episode features a discussion with Michael Gayed, author of the Lead-Lag Report on the Seeking Alpha Marketplace. Michael has been writing on Seeking Alpha since 2007 – a full-cycle contributor, you can say – and has been a regular on CNBC, Real Vision, and other outlets for a long time.
Inflation expectations have bottomed out, argues Gayed, and if reflation is the theme going forward, that means good things for some lagging equity sectors - notably financials (XLF), emerging markets ([[EEM]], [[VWO]]), and commodities like energy (XLE). On the flip side, reflation would mean just the opposite not just for bonds (TLT), but for anything yield sensitive - REITs ([[IYR]],[[VNQ]]) come to mind.
The government needs inflation, says Gayed, to ease the burden of the many trillions in debt it owes. The Federal Reserve needs it as well, he contends, to allow it the room to raise interest rates from still-extreme low levels that it might have the space to ease during the next downturn.
When reading economic tea leaves, sometimes simple is best. The average home contains massive amounts of lumber, says Gayed. Thus lumber prices can be fairly directly connected to expectations for the future of construction and housing. And if you can figure what's going to happen with construction and housing, you've probably got a pretty good idea of what's going to happen with the economy. For the moment, the action in lumber (up big over the last few months) is giving Gayed confidence in his reflation theme.
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Marketplace Roundtable #64: Assessing Risk Levels In Equity Markets, With Michael Gettings Dec 30, 2019

Show notes

Michael Gettings joins the Marketplace Roundtable Podcast to discuss his investing experience as reflected in his The Easy Vix research service.
Gettings developed an algorithm that uses the shape of the VIX futures curve, and the rate of change in the curve, to assess the level of risk in equities markets. The algorithm aims to produce warning signals when risk is emerging, rather than after it has already arrived.
The last four months the model has been giving a clear buy signal. More recently, however, "the metrics are tapering down" to right above the bullish threshold, says Gettings. "If I were to see much more deterioration, I would probably call a sell, but it hasn't happened yet."
Topics Covered
2:15 - Investing strategy
3:30 - How did you develop your algorithm?
9:00 - What do your models tell us about the present day?
12:40 - A lesson you've learned over time
14:45 - January sell single.. how bad and when will it turn around?
16:45 - What scares you about the market?
18:45 - Something that gives you confidence
21:15 - Leveraged ETFs... more or less risk?
25:00 - Portfolio warning signs/stock picks. (GE) (EW)
27:30 - Suggestions for risk protection
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Marketplace Roundtable #63: A Contrarian's Take On Investing In 2020, With KCI Research Dec 19, 2019

Show notes

William "Travis" Koldus of KCI Research rejoins the Marketplace Roundtable Podcast to discuss his investing experience as reflected in his The Contrarian research service.
An investor's formative years tend to have an impact on their investing strategy and Koldus is no different in this regard. He "came up in a value background, when most of the well-known investors were value guys." Value has been out of favor for 12 years and counting, and while Koldus has adapted his approach as markets dictate, he still maintains a value bias -- as well as a natural contrarian streak. "It's always more fun to win as the underdog," he says. "I firmly believe there's a lot of contrarian biases that go into the investing market."
Recently, growth and long-duration assets have outperformed, buoyed by the chase for yield that has accompanied record low interest rates. As a contrarian, Koldus maintains an interest "in all the other stuff that haven't gone along with the market." One of these is energy.
"If you look at the S&P 500, energy is near its 20-year low in terms of weighting." The sector has underperformed since 2011 and this became more pronounced starting in 2014. Oil prices bottomed in 2016 but equities have not followed. "There's a lot of major energy producers that are outside the major indices...that are down 70 or 80% the last couple of years."
There is a "rationalization of supply that is going on in the market right now" leaving many energy stocks in a near-perfect position to outperform. "Low prices are the cure for low prices," says Koldus. "If you look below the surface, the realized prices that some of the companies are receiving, particularly for the natural gas liquids...it's forcing a fast rationalization and you seeing that now."
Indexing is not the best way to benefit from this dichotomy. "You want to be an active stock picker," says Koldus. "That's where the real opportunity is." Nobody likes natural gas now. Investors could buy a natural gas ETF, but these rarely contain the leading companies in the index. Koldus discusses his ideas for natural gas companies at length in the back end of the podcast.
Topics Covered
2:00 - Investing strategy
3:15 - In what areas of the market are you seeing biases now?
5:30 - Is energy ripe for outperformance?
7:30 - Divergence between oil prices and energy
12:30 - Key lesson learned in general
19:00 - Lesson learned this past year
20:45 - What's an investor to do now?
26:30 - What to look as turning points for the market
31:00 - Stock picks... index vs. individual stocks (AR) (AM)
40:00 - Environment, natural gas and alternative energy
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