Fundamental value investors find it more difficult to ferret out individual stocks.

James Campbell

2017-06-03 05:35:00 Sat ET

Fundamental value investors, who intend to manage their stock portfolios like Warren Buffett and Peter Lynch, now find it more difficult to ferret out individual stocks that currently experience substantial market undervaluation. During the current economic boom, a rising tide lifts all boats, especially for tech firms, banks, and energy companies. Written by Parnassus equity portfolio managers, this article seems to emphasize the general observation that most health care and biotech stocks seem reasonably cheap relative to most market benchmarks.

However, we believe it is not likely for these health care and biotech stocks to bounce back during the current Trump administration. President Trump seeks to cut medical costs and drug prices substantially in the next few years to make health care more affordable for the American middle class without Obamacare.

The resultant competitive landscape for these health care and biotech firms becomes a unique one with fewer moats across the pharmaceutical industry spectrum. This key motif serves as part of the broader mantra of Trumponomics.

This analysis draws investor attention to big banks with minimal financial stress (after they pass the Federal Reserve's macroprudential stress test), tech stocks with average P/E ratios well above 25x (especially for FAMGA aka Facebook, Apple, Microsoft, Google, and Amazon), and energy companies (such as PSX or Phillips 66 that Warren Buffett has included as a new value stock in Berkshire Hathaway's portfolio in recent times).

The law of inadvertent consequences counsels caution.


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Federal Reserve's interest rate hike may lead to an economic recession as credit supply growth ebbs and flows through the business cycle.

Monica McNeil

2018-06-14 10:35:00 Thursday ET

Federal Reserve's interest rate hike may lead to an economic recession as credit supply growth ebbs and flows through the business cycle.

The Federal Reserve's current interest rate hike may lead to the next economic recession as credit supply growth ebbs and flows through the business cyc

+See More

Former basketball star Shaq O'Neal learns a major money lesson from Amazon Founder Jeff Bezos.

Laura Hermes

2019-08-06 07:28:00 Tuesday ET

Former basketball star Shaq O'Neal learns a major money lesson from Amazon Founder Jeff Bezos.

Former basketball star Shaq O'Neal has almost quadrupled his net worth once he learns and applies an ingenious investment strategy from Amazon Founder J

+See More

Allianz chairman Mohamed El-Erian bolsters a new American economic paradigm in lieu of the Washington consensus.

Apple Boston

2018-04-20 10:38:00 Friday ET

Allianz chairman Mohamed El-Erian bolsters a new American economic paradigm in lieu of the Washington consensus.

Allianz chairman Mohamed El-Erian bolsters a new American economic paradigm in lieu of the Washington consensus. The latter dominates the old school of thou

+See More

Michael Bloomberg helps Democrats flip the House in the midterm elections and then gears up his presidential bid.

Charlene Vos

2018-11-11 13:42:00 Sunday ET

Michael Bloomberg helps Democrats flip the House in the midterm elections and then gears up his presidential bid.

Michael Bloomberg provides $80 million as campaign finance for Democrats to flip the House of Representatives in the November 2018 midterm elections, gears

+See More

Macro economic innovations and asset alphas show significant mutual causation.

Olivia London

2023-12-03 11:33:00 Sunday ET

Macro economic innovations and asset alphas show significant mutual causation.

Macro innovations and asset alphas show significant mutual causation. April 2023   This brief article draws from the recent research publicati

+See More

Lean enterprises often try to incubate disruptive innovations with iterative continuous improvements and inventions over time.

Joseph Corr

2020-06-03 09:31:00 Wednesday ET

Lean enterprises often try to incubate disruptive innovations with iterative continuous improvements and inventions over time.

Lean enterprises often try to incubate disruptive innovations with iterative continuous improvements and inventions over time. Trevor Owens and Obie Fern

+See More