Friday, May 15, 2020

The week's interesting finds

Cymbria’s 12th annual investor day: Discussing the value of non-obvious survivors
At our 12th annual investor day, we looked at how finding non-obvious survivors helps investors more in the long term than feeling comfortable in the short term does. Watch the full recording from Wednesday’s presentation here.

This week in charts
Infotech, communication services, and health care sectors now account for 52% of the S&P 500 market capitalization.

Energy vs. S&P 500, Relative Price Performance
The relative price performance of the energy sector to the S&P 500 is now at the level of the Great Depression.

Howard Marks memo: Uncertainty
In investing, uncertainty is a given – how we deal with it will be critical. In Howard Mark's latest memo he discusses the value of understanding the limitations of our foresight and “investing scared.” Below are some of his closing remarks. 
  • The world is an uncertain place.
  • It’s more uncertain today than at any other time in our lifetimes.
  • Few people know what the future holds much better than others.
  • And yet investing deals entirely with the future, meaning investors can’t avoid making decisions about it.
  • Confidence is indispensable in investing, but too much of it can be lethal.
  • The bigger the topic (world, economy, markets, currencies, and rates) the less possible it is to achieve superior knowledge.
  • Even our decisions about smaller things (companies, industries, and securities) have to be conditioned on assumptions regarding the bigger things, so they, too, are uncertain.
  • The ability to deal intelligently with uncertainty is one of the most important skills.
  • In doing so, we should understand the limitations of our foresight and whether a given forecast is more or less dependable than most.
  • Anyone who fails to do so is probably riding for a fall.

Thoughts on the current market environment from Stanley Druckenmiller at The Economic Club of New York