NVIDIA’s Valuation and the DeepSeek Disruption Before this past weekend, we had already been analyzing NVIDIA’s (NVDA) valuation, applying the Mauboussin expectations framework to understand what growth was needed to justify its massive $3.6 trillion market cap. Is Nvidia Overvalued? What we found was eye-opening: NVIDIA’s stock price implied that the company would grow its …
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Introduction to International Diversification In the ever-evolving landscape of global investing, the allure of the U.S. stock market has been undeniable, driven partly by the meteoric rise of large-cap technology stocks. These stocks have commanded eye-watering valuations, prompting investors to increase their exposure to U.S. equities significantly. While this strategy has borne fruit in recent …
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Introduction In an era marked by rapid changes in economic conditions and monetary policies, understanding the true strength of the stock market has become more complex. Traditional metrics often obscure the underlying economic realities, making it necessary to delve deeper into value and performance. Analyzing the S&P 500 in terms of a timeless asset like …
Continue reading “The Hidden Truth: Why the S&P 500’s Record Highs Might Be Deceiving You”
At Hoover Capital Management (HCM), we’ve always championed the principles of value investing. Our commitment is rooted in the belief that focusing on fundamentally strong companies with undervalued assets leads to sustainable long-term growth. This belief is further reinforced by a recent analysis of the French High Minus Low (HML) factor, which highlights the historical …
Continue reading “The Enduring Power of Value Investing: A 97-Year Retrospective”
A Return to Dominance: The Magnificent 7’s Influence in 2023 In 2023, the financial markets witnessed a striking phenomenon. The S&P 500 and MSCI ACWI reported robust returns of 26.2% and 22.2%, respectively, signaling a buoyant year for investors. However, these headline figures mask a deeper, more intricate narrative of market concentration and disparity. The …
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In the world of investing, there are few names as revered as Sir John Templeton. A pioneer of global investing and the founder of the Templeton Growth Fund, Templeton’s investment philosophy has stood the test of time, consistently delivering value to investors. His approach to investing, which emphasizes value and contrarian thinking, resonates strongly with …
Value investing, a strategy that involves buying securities that appear underpriced by some form of fundamental analysis, has historically shown to outperform other investment strategies for several reasons: Market inefficiencies: Despite efficient market theory, which states that all available information is already factored into a security’s price, markets can often misprice securities. This can be …
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The Art of Value Investing: Unlocking Hidden Gems in the Stock Market Have you ever wondered how some investors seem to have a magic touch when it comes to picking winning stocks? They don’t rely on luck or gut feelings; instead, they follow a strategic approach called value investing. Value investing is a time-tested investment …
Neuroscience and Investing: Enhancing Global Value Strategy through Emotional Intelligence HCM believes it’s crucial to recognize the profound influence of ‘affect’ or emotional responses on investment decisions. Drawing lessons from the dot-com bubble, the FANMAG (Facebook, Amazon, Netflix, Microsoft, Apple, Google) era, and the most recent surge in AI-centric businesses, such as Nvidia, can provide …