Barron’s Weekend Summary: Cover story says managers in Barron’s Big Money Poll are less bullish about the market than they were in the spring, and a year ago
- Cover story: Following a strong decade, “America’s money managers see trouble ahead for investors. Blame it on the market’s lofty valuation, a muddled economic outlook, or the increasingly fractious political landscape, any of which could stifle stocks’ advance in coming months”— 27% of money managers in Barron’s 2019 Big Money Poll are bullish about the market’s prospects for the next 12 months, down from 49% in the spring survey and 56% a year ago.
- Tech Trader: Backers of 5G technology say it will boost the fortunes of wireless carriers, chip makers, network-infrastructure providers, and handset makers, revolutionizing manufacturing, health care, the automotive industry, and almost everything else—but investors will have to look carefully for opportunities; chip suppliers are a good way to play the trend.
- Trader: The backdrop remains positive for stocks, especially “beaten-up value stocks,” as investor sentiment about growth improves, according to Chris Senyek, chief investment strategist at Wolfe Research.
- Profile: Charlie Wilson, portfolio co-manager of the Thornburg Developing World fund, starts by seeking firms dominant in their industries and with strong balance sheets or free-cash-flow generation, after which he mitigates volatility using a combination of stock selection, portfolio construction, and currency considerations (top 10 holdings: BABA, Tencent Holdings, Samsung Electronics, TSM, AIA Group, UN, IBN, HDFC Bank, MU).
- Interview: Ian Bremmer, founder of the Eurasia Group consultancy, talks about what he calls the GZero World, in which post–World War II institutions are rapidly losing influence, and how this geopolitical unwinding has massive implications for investors.
- Features: 1) Most strategists think that it’s too soon to shift their portfolios to account for election risks, but they also think investors shouldn’t completely ignore politics; for traders worried about headlines, the smartest move at this point is to avoid political prognostication and instead focus on actual policy; 2) Cautious on SQ: Square has long been a fintech wonder, but a drop in transaction dollars flowing through its platform is worrisome, and fixing its business is going to be more difficult than is widely acknowledged; some investors think its high valuation—which treats its like a software company instead of as a payment processor such as PYPL, V, and MA—isn’t justified; 3) Market gains and investor-friendly structures have fostered the launch of a spate of new closed-end funds, including BSTZ, NRGX, NMCO, RMM, TEAF, and FINS, but they tend to have ample fees, often averaging more than 1% annually, at a time when investors are increasingly fee-conscious.
- European Trader: Positive on TUI: Consumer uncertainty over Brexit and exposure to BA’s troubled 737 Max have taken a toll on the company, the largest travel and tourism outfit in the world, but it is well positioned to benefit from rivals’ woes, and should gain from a significant increase in customers during the holidays as competitors go out of business.
- Emerging markets: Cautious on Didi Chuxing, Ant Financial, ByteDance: China’s largest start-ups face some of the same problems as their U.S. counterparts, such as doubts about whether they will ever make money, as well as problems Silicon Valley companies don’t face, including Beijing regulators’ move to constrict the IPO pipeline and U.S. tariffs on China.
- Commodities: “Silver prices have fallen 9% from this year’s highs—an opportunity for investors to buy the metal that has outperformed gold so far this month.”
- Streetwise: The TSLA board’s statement that a potential $56B pay package was needed “to incentivize chief Elon Musk to remain a fully engaged CEO” perfectly captures the absurdity of compensation metaphysics, says Robert Teitleman—the potential award is larger than the gross domestic product of 27 nations.