What we’re reading (12/6)
“Here’s When To Invest In Value” (Institutional Investor). “It’s not easy to be a value investor. Between 60 percent and 80 percent of the time, the value premium ‘either does not exist or [is] very low,’ according to a recent study analyzing value performance between 1968 and 2018. It’s only after the overall market becomes either highly overvalued or deeply undervalued that the value premium really materializes…[u]sing a collection of surveys that track investor sentiment about the market, the co-authors found that value premiums were highest after the periods in which [so-called] extrapolators reported extremely positive or negative market expectations. Specifically, they found that the monthly value premium was 1.5 percent after periods of extreme optimism, and 3.5 percent after extreme pessimism.”
“Companies Bet Big On Working From Home” (New York Times). “Work practices may never return to pre-pandemic norms. Or at least that’s the premise behind moves like the one Salesforce is making [in buying Slack], with companies hoping to cash in on the shift by assembling a suite of services to make remote working easier. Slack had a market capitalization of about $17 billion before news of the potential deal broke, and it’s now worth around $23 billion. Until the recent pop, it had recorded relatively muted growth in its share price, perhaps because its videoconferencing tools have lagged rivals like Zoom and Microsoft.”
“Inside The Retreat Of Jamie Dinan’s York, A One-Time Star Hedge Fund” (Wall Street Journal). “The end came in a half-hour Zoom town hall late last month where 61-year-old York founder Jamie Dinan, nearing tears at times, broke the news to his roughly 180 employees that York was essentially getting out of the hedge-fund game, some of the employees said. Like many hedge funds, York’s successes have been tough to find in recent years. Hundreds of funds have closed entirely. Others have cut their notoriously high fees.”
“Why Demand For Oil May Never Again Reach Pre-Pandemic Levels” (NBC News). “Oil ministers from the world’s largest petroleum producers agreed to raise global production by 500,000 barrels a day beginning in January — a move that was viewed by oil analysts as a compromise after a rare rift between Saudi Arabia and the United Arab Emirates, another major producer that historically has aligned with its larger neighbor.”
“FOMO Among Big Investors May Support Bitcoin’s Polarizing Rally” (Bloomberg). “The financial industry was something of a curious onlooker during Bitcoin’s furious, retail-led rally past $19,000 in 2017. There are signs the sector is playing more of role in the cryptocurrency’s latest surge. Licensed crypto exchanges, Bitcoin funds and a regulated futures market give the likes of trend-following quant funds, asset managers and family offices avenues for investment that didn’t exist a few years ago. Mix in this year’s 170% jump in Bitcoin’s price amid a once-in-a-generation pandemic, and it becomes clearer why more institutions might size up the volatile asset.”
