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.

Exchange Traded Funds (ETFs)

George Putnam's Strategy to Beat Passive Investing Trend

MarketWatchhas some advice for investors: "Own out-of-favor stocks held by active funds when they start beating indices again." Pointing out the difficulties currently faced by fund managers, the article cites George's observation that this "dynamic sets up a clever way to place a contrarian bet against the ETF boom." Brush cites three of George's recent stock picks and touts The Turnaround Letter's straightforward investing approach.  

A few of key points from the write-up are summarized below:

  • The author, Michael Brush, describes how the heavy inflows into index-tracking ETFs create a self-fulfilling prophecy that makes active managers’ underperformance worse. Brush cites The Turnaround Letter for a clever strategy to place a contrarian bet against the powerful ETF trend.
  • Putnam suggests investors buy stocks that are not in the major indices, that are “left behind.” These stocks may carry lower valuations.
  • If the ETF rush fades, these “left behind” stocks might perform particularly well, especially if heavy ETF selling pushes down stocks that are in the major indices.
  • MarketWatch cites three of the five “left behind” stocks that I highlighted in the May edition of The Turnaround Letter: Blackstone (BX), Las Vegas Sands (LVS) and Norwegian Cruise Lines (NCLH).
  • The article continues with three reasons cited by Jeffrey Gundlach (head of DoubleLine Capital) at the 22nd Annual Sohn Investment Conference that active managers should start outperforming ETFs.

You can access the the full article here—it is an interesting read! 

*MarketWatch, published by Dow Jones & Company, tracks the pulse of markets for engaged investors with more than 16 million visitors per month. 

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Identify & Profit from Distressed Investing

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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


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."