New Markets, New Strategies : Wealth-building Habits for Intelligent Investing

One of Wall Street's brightest new stars discusses how to navigate today's markets, for both the short and long term Investors today are looking for a solid, trusted voice to help them make sense of turbulent markets. Jason Trennert has become that voice. Trennert is a regular guest on prominent investment programs like CNBC's "Squawk Box," and his boutique research firm is popular among investment professionals and high-profile Wall Street firms. In New Markets, New Strategies, Trennert outlines an insightful, practical, and forward-thinking approach to investing. Providing investors with techniques based more on long-term performance than short-term hysteria, he explores topics including: Major themes that will move markets in the coming decade The hidden but all-too-real dangers of passive management and index funds Where and how to find stocks and bonds with the best risk/reward tradeoff Terms of Use......Page 5 Want to learn more?......Page 6 Acknowledgments......Page 9 Contents......Page 13 Introduction......Page 17 1973–1974 Revisited......Page 18 Part I: Investment Themes for the Next Decade......Page 23 Imagine a Private Company......Page 25 The Historical Importance of Dividends......Page 26 Two Percent Dividend Yields: Who’s to Blame?......Page 27 Case Study: McDonald’s......Page 29 Dividends and Growth Stocks......Page 31 Lowering the Tax Rate on Dividends and Capital Gains......Page 32 Potential Impact of the Tax Cut......Page 33 The Future......Page 38 A Note on Preferreds......Page 39 Key Take-Aways......Page 40 The Third Rail of Investment Strategy......Page 41 So What’s a Hedge Fund?......Page 42 Origins of the Present-Day Hedge Fund......Page 44 Size and Structure of the Hedge Fund Market......Page 45 Why the Growth in Hedge Fund Assets Is So Important......Page 47 The Influence of Commissions on Research......Page 49 Why Growth in the Industry Will Slow......Page 51 The High Water Mark......Page 54 Case Study: Tiger Management......Page 55 The Future: Past as Prologue?......Page 56 Key Take-Aways......Page 57 3 Washington Becomes the Center of the Universe: How 9/11 and Corporate Scandals Have Shifted the Balance of Investment Power......Page 59 War and Market Performance......Page 60 Market Performance and Exogenous Shocks......Page 62 Determining Geopolitical Risk: The Importance of Oil......Page 63 Investment Opportunities in the Defense Sector......Page 66 Investing in Iraq’s Reconstruction Efforts......Page 68 The ’62 Market Drop: Kennedy vs. U.S. Steel......Page 69 Regulators Gain the Upper Hand......Page 71 The Limits of Government Influence: The Go-Go Years......Page 72 The Presidential Election Cycle......Page 73 Tort Reform......Page 74 The Future......Page 77 Key Take-Aways......Page 78 4 Investing in Good Corporate Governance: Picking Companies That Show Shareholders Respect......Page 79 A Short History of Financial Skulduggery......Page 80 Sarbanes-Oxley and Good Corporate Governance......Page 82 An Investor’s Checklist: Warning Signals......Page 84 Good Corporate Governance Outperforms......Page 95 The Need to Take the Long View......Page 96 Key Take-Aways......Page 97 5 Winner-Take-All Markets: The Impact of Free Trade and Technology on Investors, Companies, and Workers......Page 99 Globalization and the Modern Corporation......Page 100 The New 800-Pound Gorilla: China......Page 102 Free Trade and the Outsourcing Myth......Page 105 A New Industrial Revolution: Information Technology......Page 108 Investing in Creative Destruction......Page 109 Key Take-Aways......Page 110 Part II: A Framework for Investing......Page 111 6 Taking Advantage of the Changes in Investment Research: Opportunities and Pitfalls in a Post- Bubble Environment......Page 113 May Day and the Collapse of Independent Research......Page 114 Decline in Quality, Eliot Spitzer, and the Settlement......Page 116 Sell-Side Research and Performance......Page 119 Sell-Side Research and Market Efficiency......Page 120 Case Study: Taiwan......Page 121 A New Approach to Investment Research......Page 123 Key Take-Aways......Page 127 7 The Need for a New Contrarian Approach: Charting Your Own Path......Page 129 The Contrarian Approach in a Nutshell......Page 130 Lord Keynes: The First Contrarian......Page 131 The Importance of Sentiment......Page 133 Opinion-Based Indicators......Page 134 Market-Based Indicators......Page 136 Media Enthusiasm......Page 139 The Importance of Confirmation......Page 140 Case Study: The “Coconut Crowd”......Page 141 It’s Better to Be Right than “Smart”......Page 142 Key Take-Aways......Page 146 8 The Importance of Valuation: It’s All about Potential......Page 147 It’s Not Rocket Science......Page 148 Intrinsic Value: Earnings, Inflation, and Interest Rates......Page 149 P/E Ratio: Linchpin of the Comparable Approach......Page 151 Which Earnings?......Page 152 Key Top-Down Metrics......Page 155 The Importance of Flexibility......Page 159 Where Are We Now?......Page 160 Key Take-Aways......Page 161 9 Bringing It All Together: The Market Balance Sheet and the Thrifty Fifty......Page 163 The Market Balance Sheet......Page 164 The Market Balance Sheet in Practice......Page 172 The Thrifty Fifty......Page 173 Key Take-Aways......Page 180 10 The Case for Active Management: The Future of Mutual Funds......Page 181 More Moderate and Stable Returns......Page 183 Low Nominal Growth......Page 185 The Size of Indexed Assets......Page 186 Mutual Funds Still Make Sense......Page 188 Thoughts on the Recent Scandals......Page 189 Key Take-Aways......Page 191 Conclusion......Page 193 Part I......Page 195 Part II......Page 197 Index......Page 201 About the Author......Page 209 Ongoing global instability, combined with an era of continuing and breathtaking technological innovation, has given present-day investors a profit/peril atmosphere that is virtually unprecedented in recent history. Still, in these uncertain times, millions of investors are left to wonder what they can do to garner those profits-while sidestepping the perils.New Markets, New Strategies outlines an insightful, practical, and forward-thinking approach to investing designed to succeed this year, this decade, and beyond. Written by investment strategist Jason Trennert, one of today's most respected and knowledgeable investment voices, it combines uncompromising analysis with hands-on strategies and techniques to reveal: Types of companies that stand poised to outperform markets in both the short and long term, The merit of contrarianism, with reasons and examples of why the crowd is almost invariably wrong, The importance of value, with a straight-forward approach for comparing companies across sectors, Key Take-Aways-bulleted synopses that detail what was said in each chapter and what it means to investors.From the reemerging significance of yield and dividends to the growing importance of corporate accountability, Jason Trennert focuses on the factors that will help investors prevail in coming years. How, for example, could passive investing and index funds-the darlings of investment advisors and pundits for nearly two decades-do more harm than good to the financial health of an investor? Why do critics on one side deride hedge funds as overleveraged, cost-prohibitive, and suitable for virtually nobody, while others counter that hedge funds simply remove unwelcome strategic barriers and put the interests of investors and fund managers on the same plane?Trennert addresses these hot-button issues and more, all backed with the convincing research and detail his customers have come to expect and appreciate.New Markets, New Strategies outlines an investment program based more on achieving long-term performance than on bowing to short-term hysteria. Uncompromising in its research and unparalleled in its ability to make complex concepts understandable and actionable, this groundbreaking book explains how falling back on the tried-and-true investment themes of our parents-updated, of course, for today's transformed marketplace-could pay exceptional financial rewards in the coming years. One Of Wall Streets Brightest New Stars Discusses How To Navigate Today's Markets, For Both The Short And Long Term Investors Today Are Looking For A Solid, Trusted Voice To Help Them Make Sense Of Turbulent Markets. Jason Trennert Has Become That Voice. Trennert Is A Regular Guest On Prominent Investment Programs Like Cnbc's Squawk Box, And His Boutique Research Firm Is Popular Among Investment Professionals And High-profile Wall Street Firms. In New Markets, New Strategies, Trennert Outlines An Insightful, Practical, And Forward-thinking Approach To Investing. Providing Investors With Techniques Based More On Long-term Performance Than Short-term Hysteria, He Explores Topics Including: Major Themes That Will Move Markets In The Coming Decade The Hidden But All-too-real Dangers Of Passive Management And Index Funds Where And How To Find Stocks And Bonds With The Best Risk/reward Tradeoff ' "New Markets, New Strategies reveals how investors can integrate time-tested investment lessons with all-new approaches to common stocks, to both protect themselves and profit in a volatile financial marketplace rocked by political, social, and economic upheaval."--Jacket