Picks For The Late Stage Of The Bull Cycle (Podcast)

About: VanEck Vectors Brazil Small-Cap ETF (BRF), GOOG, GOOGL, ARKG, Includes: BABA, CRM, WDAY
by: SA Marketplace Roundtable Podcast

Andres Cardenal, CFA, combines a mix of quantitative and fundamental research methods, and discusses how he puts that together on this podcast.

While there are green shoots both in the U.S. and other markets, he discusses reasons to prepare for downturns as well.

US tech including Google and salesforce.com stand out as opportunities, as does Brazil and other emerging markets.

Listen and subscribe to the Marketplace Roundtable on these podcast platforms:

By Nathaniel E. Baker

On today's Marketplace Roundtable podcast, Andres Cardenal discusses his investing research, a mix of quantitative and fundamental research methods. Author of The Data Driven Investor, he keeps a close eye on credit spreads and trends in earnings estimates, concluding that the medium-term outlook is bullish.

One key area of strength is the U.S. technology sector. Not just the big names that have dominated headlines, but individual sectors like software and semiconductors. China, Brazil and other emerging markets are looking good as well, according to Cardenal.

In China, the fundamental picture has improved substantially since the fourth quarter of 2019, and the trend indicators speak to momentum in the country's equity markets.

Brazilian markets have "massively underperformed" over the past decade, due to political and economic problems. Stocks in Brazil are cheap and the new government, for all its flaws, is starting to make meaningful policy reforms that will help the country's economy.

While macroeconomic concerns, from the inverted yield curve to a slowing economy in Europe, do provide a "wall of worry," the risk versus reward dichotomy is favorable for global equities over the next six to 12 months.

When it comes to specific securities, Cardenal likes Alphabet Inc. (GOOG) (GOOGL) as a long-term holding, due to its position as "undisputed leader" in digital advertising and on a valuation basis, and also calls out the Brazil Small-Cap ETF (BRF), ARK Genomic Revolution Multi-Sector ETF (ARKG), Alibaba Group Holding (BABA), salesforce.com Inc. (CRM), and Workday Inc. (WDAY).

Sovereign debt issuance in Japan and Europe is a point of concern for Cardenal. "If there is a bubble, at the end of the day it's not in stocks but in sovereign debt," he says. "Cheap money is a good recipe for problems." Over the long term, every investment strategy needs a plan for bear markets, no matter how bullish the near-term outlook might be.

Topics Covered:

  • 02:00 minute mark - Investing strategy, market outlook
  • 04:00 - Reasons to be confident about China
  • 05:30 - Thoughts on Brazil
  • 07:30 - Lessons learned from the markets, macro issues, bear case is clear
  • 11:30 - Quantitative signals, metrics
  • 14:30 - Stock ideas,
  • 22:00 - Market fears, risks to portfolio

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Nathaniel Baker has no positions in any stocks mentioned. Andres Cardenal is long ARKG, BABA, CRM, WDAY, BRF, GOOG, and GOOGL. Nothing on this podcast should be taken as investment advice of any sort.