Getting ahead of an economic rebound — Trading Tesla's S&P 500 debut — From community college to Wall Street
After bottoming out in historic fashion this past spring, the US economy has nowhere to go but up ... Right?
Not so fast. As COVID-19 infection rates have surged globally, Wall Street's biggest institutions are walking back their economic-growth forecasts for the near term.
In fact, JPMorgan recently went as far as to become the first A-list firm to forecast negative US GDP in the first quarter of 2021. And while Goldman Sachs doesn't yet see a full-fledged contraction unfolding, it also trimmed its expectations for the next two quarters.
But if the economists on Wall Street are getting cold feet, it's safe to say investment strategists are looking through the near-term noise and expecting a strong cyclical recovery through full-year 2021. And that expectation is informing loads of new recommendations as market internals twist and turn.
Morgan Stanley's investment chief is imploring traders to start betting on a roaring economy right now. In an exclusive interview with Business Insider, Mike Wilson gave us 5 parts of the stock market to buy, and detailed why this bull market will be different from the last few.
Goldman Sachs has observed the ongoing rotation into discounted value
And Deutsche Bank has been busy figuring out how Europe-focused investors can get in on the action. The firm is bullish on what COVID-19 vaccine progress will mean for the economy, and sees these 6 companies in particular offering huge upside.
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Since news of Tesla's December inclusion into the S&P 500 index came out on Monday, the electric-car maker's stock has surged. The company's mega-entrance shows how index fund managers tend to "buy high and sell low," which is the focal point of a 2018 research paper by investing pioneer Rob Arnott.
In an interview, Arnott explains now new index additions have historically traded, and offers a "near risk-free" arbitrage strategy that investors can take advantage of with a small part of their portfolios.
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Investing pioneer Rob Arnott told us a near risk-free strategy for investors to win big from Tesla joining the S&P 500 — and explained how the company's inclusion will lead index fund managers to 'buy high and sell low'
Kris Sidial is the co-chief investment officer at The Ambrus Group, a volatility arbitrage-focused hedge fund founded in 2018. With a gift for trading and through relentless networking, he overcame the shackles of a tough upbringing and community college to land an internship on Wall Street.
After a stint at a small hedge fund, he helped manage a $1.5 billion book at a big Canadian bank and then left to set up his own volatility shop with his partner. Sidial breaks down his two-pronged approach to managing his firm's volatility strategies and shares what retail investors should bear in mind now.
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A 28-year-old hedge fund co-investing chief shares how he advanced from community college to Wall Street — and breaks down his two-pronged approach to managing the fund's volatility strategies
Ashley Wilson, the cofounder of Bar Down Investments and HouseItLook and author of "The Only Woman in the Room," found her way into the real-estate investment realm through an inherent distrust of the
Wilson tested a plethora of strategies, including short-term rentals, house hacking, and long-term rentals, before starting a flipping business. In total, Wilson has flipped nearly 20 properties and oversees 600 units spread across Texas and Ohio.
Read the full story here:
600 units and almost 20 flips: How Ashley Wilson created a real-estate investment empire leveraging just 2 simple strategies
Stock pick central
Seeking experts who are willing to name names? Look no further:
- MORGAN STANLEY: Buy these 21 stocks set to soar at least 50% as their earnings rebound from a COVID-19-induced rout
- Buy these 15 cheap, unheralded stocks that will take off in 2021 thanks to their accelerating sales growth, Jefferies says
- GOLDMAN SACHS: Buy these 14 stocks well-positioned to see surging cash flow as the recovering economy upends the market
- RBC says buy these 25 healthcare-tech stocks to reap the benefits of the US digital health industry, which has been accelerated by 5 years because of COVID-19
- Deutsche Bank says you need to own these 6 stocks poised to surge as vaccine progress spurs an economic recovery — including one that could rally by 83%
- Buy these 33 stocks expected to outperform and crush Wall Street's expectations in 2021, Oppenheimer & Co says
- Goldman Sachs pinpoints 17 stocks poised for big moves during the upcoming holiday shopping season — and breaks down the exact options strategies for 3 of them
- JPMorgan shares 35 European stocks across 10 sectors that you need to own as the market rotates towards discounted shares — including one that could see profit growth of almost 700% next year
- MORGAN STANLEY: Buy these 5 cheap UK stocks that are poised to gain from a bounce back in the British economy in 2021
- Nomura's Shintaro Harada is beating 98% of his peers. He shares 4 Japanese stocks you need to own, and explains how his fund is staying ahead of its competition.
- Goldman Sachs analyzed 814 hedge funds. These are 15 stocks portfolio managers love and hate the most right now.
Quote of the week
"We recommend investors seek stocks with strong operating leverage to an above trend economic growth (i.e., cyclicals and reopening beneficiaries) and growth stocks with reasonable valuations (GARP) given our view for higher interest rates."
-- Mike Wilson, chief investment officer and chief US equity strategist at Morgan Stanley, summarizing an economy-dependent stock-market recommendation shared by many Wall Street experts
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