What’s Happening @ the VR View Blog and Valdao Research:
Featured Research in the VR StoreNo announcement available.
Boise Cascade is a building materials manufacturer and distribution (plywood, general home building materials) company that should continue to benefit from the uptick in new US home building. Included in…
Weak Economy, High US Equity Market Valuation
Source: St. Louis Fed Economic data
Simply, the above graph shows the US economy is not doing so great. Which is nothing new. But a “not so great” economy and an economy in “contraction” are very different environments for the capital markets. In my view, the near-term investment decision has to do with two main trade themes:
1) Being long the US equity market in the current economic environment.
2) Putting aside the not so great economic environment, the US equity market currently trades near the high range of historical valuations (using proper historical valuation methods).
1 and 2 together = not a great a great time to be long the US equity market.
Our top-down investment research, analysis and valuation work helps identify the trading opportunities that are presenting themselves in this current environment.
Future Opportunities in China
The Chinese stock market…shows no sign of improvement in the market action despite valuation on some companies being very reasonable. If you believe the Chinese economy is long-term going to be alright.
Relative to the S&P 500 index the Chinese market has been a losing bet for years now. (courtesy StockCharts.com)
We have experience researching and valuing Chinese and Southeast Asian companies. In our view, good fundamentals based long-term investments and trading opportunities exist given the decline in the mainland Chinese markets in recent years.