By James Cakmak and Ryan Guttridge

Broad market indices have gone virtually straight up since the depths of the pandemic. Sure we had some minor corrections here and there, but the S&P and NASDAQ still soared 96% and 114% higher from the March 2020 low. In fact, we’ve gone six months without a 5% correction, the 15th longest streak over the past century.

From a pure financial performance perspective, June 2021 earnings are coming strong as expected. Valuations, on the other hand, are arguably stretched. And in many cases, beyond stretched.

The S&P currently trades at 22.5x 2021 estimated earnings…


By James Cakmak and Ryan Guttridge

Snoop Dogg has it figured out.

In his latest Corona commercial, he states: “If it’s true that time is money, don’t you think the real question is how you should spend it? “Keep the change baby, find the fine life”. Intentionally or not, this is sound investment advice for the post-Corona world.

Before the internet, life and ambitions largely were defined by the following structure. You grew up, went to school, completed some level of education, worked the 9-to-5 until retirement, and finished your remaining years living off your savings.

In the last ten…


By James Cakmak and Ryan Guttridge

There has been nothing ordinary about the markets this year. In the face of unprecedented uncertainty, the broad market indices have gone virtually straight up for over a year. Investors have ignored massively depressed earnings, election uncertainty, and a widely changing regulatory environment and pushed stocks higher.

If there’s any silver lining to Covid, it’s that it accelerated the implementation and adoption of technological trends. Behavioral changes that would have unfolded over a period of years were forced upon us in a matter of months.

These productivity enhancements will not reverse once Covid is…


By James Cakmak and Ryan Guttridge

A year ago, the WSJ proclaimed the market isn’t like the dot-com bubble. We disagreed. A year later, the WSJ proclaimed the opposite. Again, we find ourselves on the opposite side of the argument.

Simply put, this isn’t 2000.

It’s no surprise fears of a tech-fueled “bubble” are surfacing. We’ve been on one of the most epic bull runs in history, with the S&P rising about 70% since the March 2020 low. There’s no doubt some valuations supply cause for concern.

While the broader market trades at a relatively high 22x 2021 EPS estimates…


Back in March, predicting the NASDAQ soaring to record levels and pushing 11,000 by midsummer would likely have been dismissed as wishful thinking. Yet here we are. The speed and magnitude of the rise has investors asking if this makes sense. Actually, it kind of does.

Bear in mind, we’re cognizant of the lingering risks on the horizon, whether it’s uncertainty into 2020 earnings, longevity of the stimulus package, or the November election. There are more macro unknowns now than in recent years.

The concern is amplified because the gain is attributed to a small group of stocks. …


By James Cakmak and Ryan Guttridge

Two investment titans — Warren Buffett and Bill Miller — are at odds on what to do with the airline stocks. The former is no longer a proponent of investing, while the latter suggests it’s a bet against hope if you don’t.

Here’s their take:

BUFFETT: “I don’t know that three, four years from now people will fly as many passenger miles as they did last year. You’ve got too many planes”

MILLER: “If you don’t own the airlines, then you’re making a bet against the vaccine”.

Buffet is clearly stunned at the speed…


By James Cakmak and Ryan Guttridge

Bailouts. That’s a word we seem to hear just about every 10 years. We’re currently spending trillions of dollars bailing out companies that — without mincing words — destroyed balance sheets and endangered the long-term viability of their respective businesses.

So why does this keep happening? Self-serving CEOs? In part, but that’s not really it. They have some skin in the game from stock compensation.

The problem is that the incentives are all misaligned with common sense.

CEOs are incentivized to load up on debt to boost earnings per share. The cash injection from…


By James Cakmak and Ryan Guttridge

Disney reported 50 million Disney+ subscribers in its first six months. That’s impressive…as a headline. However, it belies the actual reality. In truth, Disney faces more secular headwinds than any other media company.

No other media player relies more on an ecosystem than Disney, whether it’s movies, shows, watching ads during live sports, attending parks, or cruise ships, all of which rely on large crowds of people coming together. The goal is to get you in and sell you on a variety of goods and experiences throughout your life and your eventual family’s life…


By James Cakmak and Ryan Guttridge

Earnings season is upon us and it’s going to be a train wreck.

We know the first quarter took a hit and the second quarter is effectively a zero. For the balance of the year, it’s not that we still don’t have confidence in assessing when the country will reopen, but rather things will not go back to the way they were.

So with that backdrop, how do we assess the winners and losers?

During times like these, it is critical to think in terms of a secular strategy. For our part, that can…


By James Cakmak and Ryan Guttridge

This is not the first economic downturn, but it certainly was the fastest market correction in history. It even beat the record set during the Great Depression. The debate following every bear market period is when mean-reversion will take place.

The difference this time is that it’s a question of if not when life goes back to “normal”. In short, it won’t.

It’s not because of any obvious answers like social distancing. Rather, it’s because the demand for future technology has been pulled forward. …

James Cakmak

Partner @ Clockwise Capital

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