Stocks, Sectors and Bubbles

How can investors beat the market? With good research.

The recent U.S. tech stock rally has put talk about a potential market bubble back on the agenda for allocators. Looking only at the last 30 years, the discussions of whether a bubble is in fact forming or not is itself highly volatile, let alone the market activity during such periods. How can this uncertainty be effectively navigated? With the help of timely and actionable insights—such as the ones in this selection.

Overvalued Market Conditions: What Should You Do? (Elliott Wave International)

One way of assessing market conditions is to look at history—which doesn’t repeat, but echoes into the present day.

Drugs over Diet: Recent Advances in the Weight Loss Drug Category (MFS)

For compliance reasons, this paper is only accessible in certain geographies

The healthcare industry provides plentiful opportunities for global allocators interested in investing in innovative drugs.

Where Chinese Equities Go, EM Stocks Will Follow (Fidelity Investments)

For compliance reasons, this paper is only accessible in the United States

For emerging market investors, Chinese equities play an instrumental role in driving overall performance of the MSCI Emerging Markets Index.

A Case for Investing in U.S. Mid-Caps (Mawer IM)

Diversification is arguably the only free lunch in investing, and mid-cap stocks offer investors uniquely attractive properties.

Negative Risk Premium Estimates for U.S. Equities? (The Capital Spectator)

When does the longer-run valuation outlook overtake the shorter-run trend factor? This, of course, is the question that every investor struggles with.

Detecting and Timing Stock-Price Bubbles (State Street)

This paper identifies more than 2,500 bubbles in stock prices since 1973, each of which crashed by at least 50 percent.

Equity Risk Premiums: 2024 Edition (Aswath Damodaran)

The equity risk premium is the price of risk in equity markets, and a key input in estimating costs of equity and capital in both corporate finance and valuation.

Why Momentum Concentrates among Overvalued Stocks? (Review of Finance)

This study confirms that stocks within a worse information environment, or are more difficult to value, display stronger momentum.

SPIVA South Africa Year-End 2023 (S&P Dow Jones Indices)

2023 was a challenging year for active equity managers in South Africa, and particularly those with a global mandate.

The Remarkable Story of Style Regimes (CFA Institute Research & Policy Center)

The primary distinction between the growth-to-value and the value-to-growth transitions lies in their dynamism.

Is the Global Pharmaceutical Industry Failing? (INET)

Classical economic theory posits a central role for the government in rectifying such market failures through regulation, subsidies, or public investments.

Valuing Artificial Intelligence Stocks (Alpha Architect)

Artificial Intelligence is one of the most influential innovations in mankind’s history, and it is currently disrupting the global ecosystem.