Barron’s Mid-Year Rountable Barron’s 2023 Mid-Year Roundtable / Issue Date: July 17, 2023
There were no changes in the participants from January: Todd Ahlsten, Rupal Bhansali, Scott Black, Abby Joseph Cohen, Sonal Desai, Henry Ellenbogen, Mario Gabelli, David Giroux, William Priest, Meryl Witmer. Responses were phoned in, apparently a week or two earlier.
Re the elusive recession … Most expect one sooner or later. Abby Joseph Cohen doesn’t expect one at all, but concedes a number of factors, including excessively tight monetary policy by the Fed could cause one. Estimates of the onset of recession range from late 2023 to late 2024. Most it seems are predicting one in 2024 and that it will be relatively mild. However, that does not mean stocks will keep rising. Caution seemed to be prevelant among the group.
The Magnificent 7 … Most (if not all) are wary of the big tech names that have carried the markets this year. Some see a sharp sell-off coming in the high flying big tech names. Most don’t expect the major indexes to be significantly higher at year’s end than today. Some expect them to fall. Mario Gabelli thinks that when investors’ buoyant expectations finally clash with continued Fed rate hikes & strident language, the S&P could fall by 10% in the second half. Health care remains a favorite. Everyone suggested some smaller overlooked niche players as opportunities. Genuine Parts (GPC), recommended by Gabelli, fits this theme. He sees it as a play on a “huge pent-up demand for automobiles.” Gabelli also likes aerospace - but leans toward some European manufacturers, including Airbus.
Bonds … Franklin’s Desai favors bonds, but would average in to (longer) maturity as the 10-year rises above 4%. Sees it getting to around 4.25%. She also favors high yield - particularly municipal high yield bonds. It should be noted Desai is a fixed income manager at Franklin and often favors the bond sector. She often recommends Franklin’s income funds along with others.
Europe … One member referenced the stubborn inflation in the U.K. as “the canary in the coal mine” that could signal similar issues arising at home and globally and lead to even tighter monetary policy. Yet, generally, the tone on European equities was quite positive. While some individual Japanese stocks were mentioned, I don’t recall anyone being outright bullish on Japan. Its stock market has enjoyed a significant boom over the past year or two.
Geopolitical peril is highlighted by Priest: The war in Ukraine, U.S. China tensions, political strife at home, likelihood of higher rates in Europe. Not calling for recession, but Priest expects the S&P to fall in the second half, while equal weighted indexes might hold their own or rise slightly. Scott Black comments that “investors are much too bullish.” But his remarks appear largely based on S&P valuations. Anyalists, Black says, are projecting S&P earnings growth above 10% for the year - totally unrealistic in his view. Bhansali is arguably the most bearish of the lot. Even he sees “opportunity” in value stocks - but mostly abroad, including EM. Referring to Fed rate hikes and inflation Bhansali says: “The Fed has a lot of wood left to chop.”
David Giroux (T. Rowe Price) commented: “The market was helped by the lack of a recession, resilient earnings, and excitement about AI, which turned the tide in terms of investor sentiment and valuations in the technology sector. The challenge now is that the market is trading for 19 times forward earnings, and valuations aren't as attractive as they were. Now that everyone seems bullish, we are a bit more bearish. You'll see that in our stock recommendations. Cyclicals and tech have had a big run. Now we prefer more-defensive sectors, such as healthcare and utilities.” Others echoed Giroux’s caution, if not his exact words.
A “non-political” political remark by Giroux may raise a few eyebrows: “And, while I am not making political projections, if the Republicans take back the White House in 2025, UNH and managed care stocks generally could have significant upside.”
Top picks:
Ahlsten: ORCL - Oracle
Bhansali: ITUB - Itau Unibanco Holding
Black: EXP: Eagle Materials
Cohen: iShares S&PU.S. - Banks
Desai: 5-YR TIPS
Ellenbogen: JBHT - J.B. Hunt Transport Services
Gabelli: BATRA - Liberty Braves Group
Giroux: BIIB - Biogen
Priest: Air.France - Airbus
Witmer: ONEX - Onex, Canada
Charles Schwab announces TD Ameritrade data breach My TD migration date is many months away. TD said if I want to move sooner, I have to go through the account transfer portal (ACAT) and that it could take up to one week.
I setup a Schwab account and moved 9
5% of my stuff over back in summer 2020 and it went rather smoothly ... I didn't want to go thru *another* brokerage account mass migration. I need to check if my $1
5 OEF fee conveyed, but if it didn't, when they finally get around to moving my TD account, I will be sure to confirm the $1
5 OEF fee is included. (Thx for the reminder)
Charles Schwab announces TD Ameritrade data breach Wow, they're really dragging out the process in some cases, but it's probably better they go slowly to smooth out the bumps. My transition, as I said, went seamlessly over a weekend.
They DID suggest that you set up Schwab account/login prior; that way there will be no issue with your login. Had the advantage of allowing me the 'new account' bonus! And, grandfathered the TOS $15 purchase fee in lieu of their $49.95 fee. So far, no problems, but I DID change my password just now...
Need a solid, good, consistent, un-flashy AA fund. (Closed thread.) @fundly,
A lot of brokerages charge a transaction fees (e.g., $
50) for purchase of mutual fund institutional class shares but they do not charge a short term redemption fees (the fund itself may have its own STR fees). Am I correct that Firstrade does not have a transaction fees but has a STR fees of $19.9
5 for Institutional class shares held for less than 90 days?
From Firstrade website - "A Short Term Redemption Fee of $19.9
5 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $19.9
5. Redemptions of less than $
500 will incur a $19.9
5 fee, unless the entire value of that fund is less than $
500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete."
Thanks.
FD1000...3-Line Break Maybe the two belligerents need to take a long walk to cool off.
Charles Schwab announces TD Ameritrade data breach (x-posted from Armchair...)
Charles Schwab announces TD Ameritrade data breach
Charles Schwab Corp., the parent company of TD Ameritrade, Inc., has disclosed that it is just the latest company to suffer a data breach resulting from vulnerabilities found in MOVEit file transfer software. While the company claims that the computer systems of both companies remains unharmed, customer data stored on Ameritrade’s MOVEit server was compromised.
The incident is currently under investigation by both Schwab and Ameritrade, with a thorough analysis expected to be completed soon. Upon conclusion, Schwab says, affected customers will be notified.
This data breach holds significant implications, as it contributes to one of the largest breaches of 2023, affecting millions of Americans. The compromised information puts individuals at an increased risk of identity theft and other fraudulent activities. It is crucial for customers who receive a data breach notification from TD Ameritrade or Charles Schwab to understand the potential risks and take appropriate measures.
The cause of the breach stems from vulnerabilities discovered in the MOVEit software, which TD Ameritrade used on a limited basis. The incident came to light after the software’s developers detected a zero-day vulnerability.
Promptly responding to the potential security breach, TD Ameritrade ceased using MOVEit and promptly informed law enforcement. Simultaneously, an investigation was initiated to determine the scope of the breach and the specific client data that may have been exposed. Although this investigation remains ongoing, Schwab estimates that approximately 0.5% of Ameritrade’s clients may have been affected. That could mean up to 55,000 clients have been affected.
< - >
www.investmentnews.com/charles-schwab-announces-td-ameritrade-data-breach-239887
(I have TD and Schwab accounts and heard nothing - it would be nice of them to inform all account holders!)
Wealthtrack - Weekly Investment Show July 1
5 Episode
Discover investment opportunities in this field through the expertise of Lucas White, Lead Portfolio Manager of GMO’s successful Climate Change Strategy. With the impressive performance of GMO’s Climate Change Fund, which beats its benchmark and boasts 12% annualized returns, investors gain exposure to companies combatting climate change and adapting to its effects. White shares insights on the fund’s unique approach and discusses his journey in launching it.
Need a solid, good, consistent, un-flashy AA fund. (Closed thread.) PRWCX is closed to new investors, so I don’t know why people keep recommending it.A few reasons:
1. It serves as a benchmark
2. It may be open to investors in 401(k) or other employer-sponsored plans that include it as an option
3. It is open to "mass affluent" investors (see below).
4. Some people own shares and are interested in how the fund is doing (is it a buy?).
Supposedly there are round-about ways to open a new account, but I view that as a myth. Fund companies reward account size, not longevity. Vanguard opens some of its closed funds to Flagship ($1M+) customers. Artisan allows shareholders who hold more than $2
50K in its funds to buy into closed funds like ARTKX (see
statutory prospectus). Similarly, T. Rowe Price allows investors holding more than $2
50K at TRP to invest in its closed funds, via its
Summit program. This program replaced its Select Client Services
in 2021. These "back doors" are not myths.
In a way, you were right to wait for TRP to partially open its closed funds. Around the end of 2020
T. Rowe Price reorganized itself in part to give it greater capacity. Not long after, it made its closed funds available to some investors.
Maybe you left before TRP sent out the memo. Or maybe, in splitting assets across institutions, you maintained only a toe hold at TRP. Whatever. Time is not what matters. I've had assets at Fidelity since before I was born (parents set up a UGMA account with really old fund shares). Yet Fidelity doesn't even offer me a free copy of Turbotax.
TRP's brokerage was always an adjunct to its fund business - offered as a convenience to its fund investors but not its mainline business. (A $3
5 fee each way on TF funds and a six month holding period is not competitive.) So it's not surprising that you would find Fidelity a better platform for securities aside from house funds.
Good luck with TCAF. It's not a clone of PRWCX - simply by its nature as a pure equity funds I expect it to outperform over time with greater volatility.
