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.

Bulls Make Money; Bears Make Money...but Pigs get Slaughtered

As a result of the recent five-year anniversary of the low point from the 2008-09 stock market meltdown, we’ve been reading a lot about the bull market and thought readers might find a little background information on the topic of interest. The phrases “bull” and “bear” are used to symbolize the way each animal attacks: Bulls’ horns thrust upward, while bears’ paws fall downward. Like the name suggests, bull markets are noted for a long-term trend of overall economic/investor confidence and optimism that those positive results will continue. To be considered a true bull, there needs to be an increase of at least 20% for a minimum of six months and these markers must follow a decline of at least 20%.

The longest-running historic bull run began in October 1990 and continued through early 2000. Thebull market with the highest gains—and likely greatest recognition—began in October 1923. By September 1929, that market had risen 345%; however, once stock prices began to decline, a true free fall and panic followed. October 29, 1929’s Black Tuesday and, ultimately, the Great Depression, followed.

On a more upbeat, bullish note—and speaking of anniversaries, MarketWatch also recently recognized the current bull market anniversary. In “Celebrating Bulls Lose Sight of Bearish Picture,” Mark Hulbert notes that although the stock market has been performing favorably over the past five years, a very different picture emerges if you go back just 18 months prior to that time frame—and the picture is even more bleak when dated back to 2000.

On the whole, the stock market has performed relatively dismally over the last 15 years, which is precisely why “Celebrating Bulls Lose Sight of Bearish Picture” emphasizes the importance of picking the right advisor: Mark Hulbert notes, “Handsome returns in the stock market will be achievable—but they will be harder to come by, since the market itself will not be providing as hospitable an environment as was the case for most of the last century.” This same article also recognizes The Turnaround Letter’s #1 performer rating: “...[T]he news isn’t all bad. Some of the advisers monitored by the Hulbert Financial Digest have done very well, thank you, despite the mediocre environment….” This accolade is all the sweeter when you consider oursolid 13.1% annualized return—vs. the Wilshire’s 3.6% for the same time period—all in the midst of the challenging environment we’ve seen since March 2000. 

The take away here is that, with the right approach and a reliable advisor, investors can always find a way to lock in stock profit—which brings me back to the old Wall Street adage: “Bulls make money; bears make money but pigs get slaughtered.” Those who consistently pursue a bullish strategy can make money, as can the ones that are consistently bearish. After more than 27 years in the stock market, we know that one of many keys to stock market success, in any environment, is to be content with taking solid profits and leave the pigs to fight over those financial scraps!

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Turnaround Investing Blog

Is there value in bankrupt PG&E’s stock?

In nearly every case, the shares of a company in bankruptcy become worthless. In very rare cases, however, they can become great investments. W.R. Grace (NYSE:GRA) shares produced a 75-fold return, as an example. With California utility PG&E (NYSE:PCG) now in bankruptcy, the range of possible outcomes for its equity is wide.

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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.

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Turnaround Letter Stock Pick Named Top Performer of 2017


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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."