The following summary of our Editors' Picks for the previous trading day is a potential new feature that we're currently testing. Each article listed below has been selected by our editorial staff as a widely appealing and highly convincing analysis with a clear actionable takeaway. Please comment at the end of this article to express your thoughts. We are grateful to hear your feedback.
Our editors' selected articles for Wednesday include a Belgian automotive distribution company, a couple of analyses of the Fed and interest rates, and two unique takes on portfolio theory and trading practices.
Picks Of The Day
In the final part of a lengthy discussion on the trading practices of large brokerages, specifically margin restrictions, the author concludes by warning investors to not only "carefully consider the risks associated... with vicissitudes in the market," but also weigh chance that their broker will "dump them out of their position following a market dislocation." We recommend the complete article to large, experienced traders (find Part 1 and Part 2 here).
Tags - Portfolio Strategy, Trading
While many retirees rely on dividend-paying stocks for income, Dale Roberts looks into whether the dividend itself is more important than what a steady dividend says about the fundamentals of a company. He argues that one's allocation strategy, specifically the inclusion of low-risk, steady growth assets to protect against market-wide drawdowns, are most important. "Defense wins championships," Roberts says, echoing the advice from top investors such as Warren Buffett, Ray Dalio and Howard Marks.
Tags - Portfolio Strategy, Retirement
In this detailed analysis, the author explains why he thinks the Fed may be wrong about its assumption that rising rates will slow economic growth. By focusing on inflation and wage growth, Cowette dives into historical data to prove his point: that the Fed shouldn't be so quick to assume that increasing interest rates will lead to a recession.
Tags - Federal Reserve, Economics
The Federal Reserve Has Never Printed 'Money': Part I by Eric Basmajian
A fundamental misunderstanding of the Fed's mechanisms has left economists and investors wrong-footed over the past decade. Eric Basmajian explains how to best understand Fed actions and what that means for the macro landscape.
Tags - Economy
While the political and business landscape in South Korea is uncertain, Franklin Templeton believes that an abundance of strong investment opportunities exist. In this compelling article, the authors reflect on their trip to South Korea and how the experience offered them insight to emerging market investing going forward.
Tags - South Korea, Emerging Markets, Economics
This article is mainly about MoviePass, a service that Helios ( HMNY ) has a 53% ownership stake in. MoviePass allows consumers to go to one movie per day for a monthly price of $9.99. Since the service is rather new, and the market is in transition, the author highlights its risk. In addition to potential future dilution, the fundamental risks for investing in Helios seem too large for most investors. Courage & Conviction Investing recommends to steer clear!
Tags - Short Ideas
In the second part of this highly detailed analysis ( see Part 1 here ), Scott Kennedy presents his projections for AGNC's ( AGNC ) next earnings report. He projects that AGNC will report a modest gain in the company's derivative instruments and securities, and a large gain in its MBS portfolio for the third quarter 2017. Stay tuned for Part 3, which will detail his detailed MBS projection analysis.
Tags - Dividends & Income, MREITs
The Seeking Alpha team goes one on one with Avisol Capital Partners (author of The Total Pharma Tracker) to explain their valuation methodology for biotechs and to discuss specific red flags to look for when evaluating investment opportunities.
Tags - Biotech, Interview, Seeking Alpha
In this comprehensive short analysis, White Diamond Research presents a convincing argument to bet against Everspin Technologies ( MRAM ). Even with its recent pullback, the company's inferior products, according to the author, will be responsible for its demise. While near-term price movement will be based on management's guidance going forward, there's good reason to believe Everspin is a solid long-term short idea.
Tags - Short Idea, Comprehensive Analysis, Chip Makers
Kroger Convenient No More - A Rangeley Capital Podcast by Chris DeMuth Jr.
The Rangeley Capital portfolio managers - Chris DeMuth Jr. and Andrew Walker - discuss Kroger's ( KR ) competitive position in the face of Amazon's ( AMZN ) acquisition of Whole Foods Markets, and the enduring outperformance of spin-offs.
Tags - Grocery Stores
MoneyGram's CFIUS Problem by Bledsoe Research
MoneyGram (MGI) has agreed to be bought out by Alibaba (BABA) affiliate Ant Financial, but getting regulatory approval may be tough, argues Bledsoe Research. A deal break could reward shorts.
Tags - Short ideas, Business Services, M&A
Our Pro Pick Of The Day
D'Ieteren Trades At A Discount To Conservative Sum Of The Parts Valuation by The Investment Doctor
D'Ieteren (SIETY) is undervalued, argues The Investment Doctor. The Belgian automotive distribution company exhibits strong FCF growth and its proceeds from the sale of its stake in Belron could help the company delever and unlock value. The author conservatively believes there's 25% upside in this play.
Tags - Long Ideas, International Investing
Have any thoughts about these articles? Email us at email@example.com and we'll do our best to get back to you quickly. In the comment section below, let us know which articles you thought were the most convincing and valuable to our community.
Click here to read yesterday's edition of the editors' picks daily.
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