The Internet of Things: The Rise of the Machines Is Here

You’ve just settled into your seat in a jetliner when the pilot announces a mechanical delay. Unfortunately, this is not an uncommon experience. But it could become a rarity before long, as jet engines and other moving parts are increasingly wired with technology that can diagnose problems before they occur.

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Getting Back into Value Equities

It finally feels like a great time to be a value investor again. After several challenging years, market conditions have become much more conducive to finding undervalued, controversial stocks with long-term payoff potential. Even after this year’s equity-market rally, we think the value rebound is just beginning.

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Better Beta Is No Monkey Business

The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as the complete works of William Shakespeare. This makes perfect sense to me, but says more about infinity than it does about monkeys.

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Predicting Death to Find Life in Emerging Market Stocks

Over the past year, investors have become excessively cautious about emerging markets. To compensate for the additional uncertainty, many underestimate the upside potential. Paradoxically, to get a better handle on the risks, we believe they should assume the worst. By using this “pre-mortem” approach, not only do they have a better chance of avoiding disaster, [...]

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Companies Can Do More to Unlock Shareholder Value

As the global recession and financial crisis move further back in the rearview mirror, companies have been more proactive about using their balance sheets in ways that enhance shareholder value. But we think they can do a lot more.

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Time to Bench the Equity Benchmark Too?

While fixed-income investors are growing increasingly aware of the risks of benchmark-oriented bond portfolios in a period of rising rates, equity investors have recently also started to question the wisdom of cap-weighted indices. We would go even further and argue that the performance of a cap-weighted benchmark may be irrelevant for the long-term goals of [...]

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Sugar: A Sweet Spot for Emerging Market Investors

Sugar consumption has often been seen as a mark of affluence. But for emerging market investors, knowing how sugar is consumed can also be a guide to the successful investments of the future. We argue that only on-the-ground grassroots research can provide the knowledge needed to find these investment sweet spots.

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What’s the Point of Investing in Dreams?

Is innovation dead or are we on the cusp of new technological revolutions? Without resolving this epic debate, we believe that market conditions today are conducive to investing in companies with disruptive potential, but it takes a sober approach to find big dreams that can deliver big returns.

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The Case for the 20,000 Dow, One Year Later

In July 2012, we argued that the Dow Jones Industrial Average would rise to 20,000 within a decade. At the time, the 20,000 Dow looked impossibly far off. With the market up over 20% since then, our forecast now seems less ambitious. What has changed over the past year? And what should we expect looking [...]

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When Rising Rates Hurt Stocks, How Bad Did It Get?

By Chris Marx (pictured) and Alison Martier A reader of our recent blog post about stocks in rising-rate environments asked us for more details on the magnitude and timing of any stock-market sell-offs during those periods. They were uncommon but ugly, so we thought our answer warranted another post.

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