Category Archives: News

Growth Stocks are Risky

Today's massive losses in ULTA, a well-known high-flying stock, serves as a cautionary tale as to what happens when stocks with overinflated expectations face economic reality. As the chart above shows, growth stocks in general, such as those that now dominate the S&P 500, are as expensive as they were in the year 2000. Therefore…
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The Backdrop for Stocks is Good, But the Bear Case Is Strong

In Highgate's 2nd quarter letter, we outline the case for a continued cautious approach to investment markets. Leadership in the market is narrowing, domestic stocks (as indicated by the Russell 2000) are down significantly from their highs and economic growth has been entirely underwritten by an increase in government spending. More importantly, signs of excessive speculation are everywhere. I hope you enjoy it and look forward to hearing from you!
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Trade Turmoil and the Stock Market – What Does It Mean?

Trade talks with the Chinese recently suffered a setback and new tariffs were announced by the Trump Administration. This roiled stock prices because expectations, set by Donald Trump himself, have been set high that a deal would be achieved. This article dives a little deeper on what it all means since trade-related headlines have been greatly impacting stocks recently…
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Tech Bubble Redux

With the upcoming parade of tech IPOs from Silicon Valley to Wall Street, the current environment is reminiscent of the late 1990s: An accommodative Fed, euphoria over new technologies, a handful of seemingly infallible tech companies leading the market higher, peak popularity of index investing and value stocks underperforming. But what is also reminiscent of the late 1990s is that the IPOs coming to market are for unprofitable companies, there is significant Wall Street and media hype and fanfare, tech stock trade at extremely expensive levels, and very few are interested in stocks of great companies that trade cheap. What followed the late 1990s was a period where technology stocks got destroyed and the prices of value stocks rose significantly.
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