Technology Outperformance No Longer Supported By Fundamentals

Source: Morgan Stanley

A word of caution from Morgan Stanley’s equity strategists:

« The latest burst of Tech outperformance has not been accompanied by superior EPS trends. Just now Tech shows few signs of stopping (or even slowing); for example: i) post its largest 1m outperformance versus the S&P since 2012, the NASDAQ is now 2.7SD above its 12M relative average; ii) 80% of constituents of MSCI ACWI’s IT index outperformed the market over the last month, the highest breadth reading since 2003. Amid all this euphoria we’d encourage investors to keep a close eye on EPS trends as the latest burst of price outperformance has not been accompanied by EPS outperformance. »

It seems investors have started noticing.

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Where There Is Music There Is Melody – Leonard Bernstein

I like finance AND music. Music is very important to me and I think it helps a lot in life. I’m a big fan of rock music, but I also like jazz and classical. So from time to time I’ll post musical stuff. Hope you like it. Best.

I’ve never seen a great composer/director be so kind and easy at explaining music. I wish we had more like him.

Being a « Biography Nut »

« I am a biography nut [myself]. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economies better if you make Adam Smith your friend. That sounds funny, making friends among ‘the eminent dead,’ but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better for you in life and work better in education. It’s way better than just giving the basic concepts. »

Charlie Munger

Sauce: Poor Charlie’s Almanack, Expanded Third Edition, 2005