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Rob Rodriguez on investing


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Apologies if this has been posted, just saw it and thought the board would enjoy:

 

http://www.fpafunds.com/docs/special-commentaries/2014-10-cfa-society-of-reno-speech.pdf?sfvrsn=2

 

My favorite part:

 

"The stock market has been a fabulous place to be, particularly the past two years. However,

approximately 60% of the market’s total return for this period has been a function of PE expansion. Profit

margins have only improved slightly while top line revenue growth for the S&P500 has averaged between

2.5% and 3%. In contrast, earnings’ per share growth, benefitting from aggressive corporate share

buybacks, has been above 5%. I warn you that share buy backs should be viewed skeptically since

corporations have a long history of implementing them at stock market peaks while they are then

terminated at troughs. "

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Apologies if this has been posted, just saw it and thought the board would enjoy:

 

http://www.fpafunds.com/docs/special-commentaries/2014-10-cfa-society-of-reno-speech.pdf?sfvrsn=2

 

My favorite part:

 

"The stock market has been a fabulous place to be, particularly the past two years. However,

approximately 60% of the market’s total return for this period has been a function of PE expansion. Profit

margins have only improved slightly while top line revenue growth for the S&P500 has averaged between

2.5% and 3%. In contrast, earnings’ per share growth, benefitting from aggressive corporate share

buybacks, has been above 5%. I warn you that share buy backs should be viewed skeptically since

corporations have a long history of implementing them at stock market peaks while they are then

terminated at troughs. "

 

Thanks for posting. Always well thought out.

 

He sounds a bit like a perma bear, not much has changed over the years.

 

However, unless other managers, his funds are doing well. So it seems like they select bottom up and worry top down.

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