Turnaround Investing Blog

George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

Stock Market Forecast: As January Goes...

Excerpted from February 2014 Issue

…so goes the year. This saying is one of many gimmicks that investors use early in the new year to try to predict how the stock market will perform in the year to come. With the stock market turning down in January, many investors are looking to various crystal balls for guidance on where the market is going for the rest of the year. Among the other “indicators” that people look at are things like the following:

  • First five days of January--if the market is up in the first five days of January, it will be up for the full year, and vice versa.
  • Super Bowl winner--if an NFC team (or a former NFC team) wins the Super Bowl, the market will be up; if an AFC team wins, the market will be down.
  • Hollywood indicator--if Hollywood comes out with a blockbuster film about Wall Street (such as The Wolf of Wall Street) around the beginning of the year, that is supposed to be negative for the market.
  • Butter Production in Bangladesh--supposedly if you multiply the annual change in butter production in Bangladesh in the preceding year by two, it will give you the exact percentage by which the S&P 500 will move in the year to come.

Of course, there are several basic problems with all of these. First of all, they have little or no economic basis. You could perhaps argue that the market’s movements in January may give some indication of investor sentiment that could carry on through the year, but a lot can happen in the next 11 months to change that sentiment. And most of the other indicators rely much more on coincidence than even a whiff of economic reality. The second problem with these stock market indicators...

Read More Distressed Investing Blog Entries

Identify & Profit from Distressed Investing

Free Report: Turnaround Investing Mistakes

Turnaround Investing Blog

Turnaround Investing Blog

Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

Read More.

Turnaround Letter Stock Pick Named Top Performer of 2017

 

stock market advicex

 

What Last Year's Top Stock Pickers Are Buying in 2018

 

This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.

 

George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."