Mutual fund cash levels have historically been one of the best contrarian indicators of where the market is headed… one that’s still well worth tracking today. And right now, asset managers are holding their lowest levels of cash in history – meaning they think the market is headed higher.
Today we’re turning over the entire issue to readers. Over the last few weeks, Porter has written about a few topics that have generated more feedback than usual – on distressed investing, Trump’s economic policies, and more… Plus, some fishing photos.
Devastating as the recent stock market decline is – particularly after two straight years of 20%+ returns – a real downturn in the financial markets feels a whole lot worse, says our Director of High Yield Marty Fridson. The late 1970s/early 1980s was a bond market apocalypse, he says.
Porter reports that a $1.2 billion investment into a natural gas company is the start of the most important financial trend in the world. “We are just in the first inning,” he writes.
Since we recommended this company’s bond a year ago, the company has improved its performance, and the bond, still a year out from maturity, is trading near face value, having increased in price by 24%. This month, we are adding the shares to the portfolio.
The company we are recommending is the world’s second-largest company in its category. Yet despite generating 90% of the free cash flow as its top competitor, this company trades around half of what that number-one brand trades for. We believe this valuation gap will narrow significantly in the years ahead.
Porter outlines why this national homebuilder has become a superb business. He explains why it’s positioned to become a great, long-term compounder.