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      • Democracy’s Blockbuster Year

        23 January 2024   |  

        2024 is expected to be one of the biggest election years on record with more than half of the world’s population planning to go to the polls. This busy election calendar comes at a particularly opportune time as geo-political tensions are running high across the globe.

      • Thoughts and Takeaways From The EMsights Annual Research Retreat

        03 January 2024   |  

        The EMsights Capital Group held their annual research retreat in December. For two days the investment team gathered off-site to recap the events of 2023 and look forward to 2024. This year’s agenda also featured several outside speakers ranging in expertise from the Russia/Ukraine war to the current health of the US economy.

        Over the course of the two days, the team identified several cross-regional trends they expect to remain prominent in 2024:

      • The Case for a Dedicated Allocation to Mid Caps

        20 December 2023   |  

        In our previous blog post “Narrow Leadership Creates Opportunity”, we highlighted the attractive valuations of US mid-cap stocks, which are at their cheapest levels relative to large caps in over 20 years. As value investors, we distinctly understand the importance of starting-point valuations for forward returns, however you don’t have to be a value investor to appreciate the asset class’s appeal.

        Since 1979, the Russell Midcap® Index has outperformed both the Russell 1000® and 2000® indices (Exhibit 1) on an annualized basis by 0.8 percentage points and 1.9 percentage points, respectively. While that may seem small, the power of compounding can result in large differences as one’s time horizon expands.

      • Is Argentina Out Of The Woods Yet?

        21 November 2023   |  

        On Sunday, November 19, Argentina elected Javier Milei to be its next president in a decisive run-off election. Radical libertarian outsider, Milei, defeated Sergio Massa, the country’s Minister of Economy since August 2022. Voters, investors, and business owners are hopeful Milei’s libertarian policies, which are a drastic divergence from the current policies, will aid Argentina’s recession-prone economy. The country is currently facing inflation topping 140%, interest rates at 130%, dwindling central bank reserves, and a weakening currency regime. However, the grass may not be greener on the other side. Implementing Milei’s policies will be a challenge without a congressional majority, and his abrupt, “chainsaw” approach may backfire. Even Taylor Swift's Eras Tour, which visited Buenos Aires last week, could not boost this economy—is there anything that can?!

      • Narrow Leadership Creates Opportunity

        13 November 2023   |  

        The US equity market’s narrow leadership in 2023 is well chronicled, but it’s nearly impossible to overstate.  The “Magnificent Seven”, as the largest seven US stocks have been dubbed, have dominated YTD equity returns—contributing, in effect, 100% of the S&P 500 Index’s total return (through October).

        These seven stocks have returned on average 84%, compared to -3% for the “S&P 493”, and more than half of S&P 500 stocks have generated negative returns. In fact, the equal-weight S&P 500® Index is lagging the market-cap weighted S&P 500 by the most since 1998 as the S&P 500 Index is up over 10%, while the equal-weighted S&P 500 was down ~2% through October.

      • Easter-Egg Hunting: IMF Edition

        02 May 2023   |  

        EMsights team members returned to Washington, D.C., in April for the IMF and World Bank Spring Meetings, conducting some 200 interactions with a swath of government officials and representatives. Frequent readers will recall we similarly attended the IMF and World Bank Annual Meetings last fall—and were unsurprised by the somber mood, given ongoing macro and geopolitical uncertainty.

      • Growth Team 5 in 5: Health Care

        06 April 2023   |  

        The Growth team has consistently found health care to be a key area of idea generation given the existence of companies with attractive franchise characteristics experiencing interesting profit cycles. From a franchise standpoint, many health care companies enjoy defensible competitive positions through intellectual property protection, strong brands or leading market share positions. From a profit cycle standpoint, this is an area of constant innovation, and innovation tends to breed profit cycles.

      • Let Freedom Ring

        09 March 2023   |  

        EMsights Capital Group believes that economic and political freedoms and rule of law are important precursors for the economic development, growth, education and sustainability of sovereign countries. Through active due diligence, including on-the-ground country visits, in-person meetings with political, business and government officials, and daily monitoring of political and financial news, we actively follow a country’s pursuit and execution of fair and free elections, civil liberties, functioning of government, and the importance it places on economic freedom in real-time – in both its rhetoric as well as its enforcement of these principles.

      • Reality Bites

        02 March 2023   |  

        Over the past year, Egypt made headlines as it worked to navigate through a challenging macroeconomic operating environment and high external financing needs. In particular, the recent surge in US Treasury yields gave rise to the harmful narrative that “markets are closed” to countries like Egypt that would need to price new issuance yields in excess of 10%. We think this narrative has been harmful as it incentivizes countries to wait until they are facing significant time pressure. Instead, we believe countries should take a long-term view, recognizing that yields move around, and begin to formulate financing plans that acknowledge the reality of current market pricing.

      • Anthro-Vision

        16 February 2023   |  

        Researchers, investors, the occasional interviewees[1] and even the CEO of Artisan are often incredulous when I say my undergraduate anthropology major is a cornerstone of my daily investment process. Occasionally I get feisty and defend myself, but I often defuse the situation with what passes for humor in the investment world and move on. No more! Gillian Tett’s 2021 book Anthro-Vision: A New Way to See in Business and Life will be my public defender.