ERShares In The News

Joel Shulman discusses opportunities in US Small Cap, US Mid Cap, and Non-US markets. He notes that Apple and Microsoft have contributed much of the return in well-known indices and believes other markets have time to catch up. He cites a couple of specific examples and addresses other topical issues as well.

During today’s broadcast on Fox Business, Dr. Shulman notes that in the past month US Small Caps have led all major equity categories (+6%) yet still remain 8% below last year’s highs. He believes this category along with US Mid Caps and non-US will continue to perform well in the weeks ahead. Other comments address recent moves by Warren Buffett and other individual stock names.

Babson College Professor Dr. Joel Shulman discusses Zillow and the changing revenue model orientation. He notes that they are shifting from being a riskless broker to a dealer of property engaged in home flipping. The latter incurs significant risk with borrowing costs, inventory positions, and greatly reduced margins. Dr. Shulman also discusses Disney earnings and new streaming service revenue.

Babson College Professor Dr. Joel Shulman addresses the earnings of well-known companies such as Facebook, Apple, and Starbucks. He also comments on year-end expectations, the potential for strong holiday sales and remains optimistic about the future of US Small-cap and Non-US stocks.

Babson College Professor Dr. Joel Shulman discusses a variety of stocks, such as Coke, American Express, Netflix, and Ford on Varney & Co. He notes that the American economy is strong and agrees with the host (Stuart Varney) that the US markets are the best place to be for investors. Professor Shulman reiterates that US Small caps look especially attractive in these markets.

Babson College Professor Dr. Joel Shulman discusses the China trade deal and market movements over prior discussion periods. He also offers insights on Bed Bath & Beyond and Walmart. Finally, he notes that US large Cap entrepreneurial companies such as the FAANG stocks (Facebook, Apple, Amazon, Netflix, and Google), along with FedEx, will be beneficiaries if trade talks progress well.

Babson College Professor Dr. Joel Shulman discusses opportunities with US Small Cap, US mid-cap, and shines a light on a specific healthcare company. He remains bullish for year-end performance.

Babson College Professor Dr. Joel Shulman discusses Peloton’s recent IPO and expresses reasons for concern. He mentions that the company recognizes revenues in full immediately, even though most customers finance 100% of their purchase. Notably, the company does not show any bad debts or high accounts receivables balances which could be a problem in the future. During the show, Dr. Shulman also discusses problems with recent IPOs (Uber, Lyft, We Work, Endeavor, etc and the current climate. It’s common knowledge that some IPOs have dropped significantly since inception or pulled the IPO altogether. He cites bad behavior among some executives who may be exhibiting poor judgment or self-dealing. Dr. Shulman provides historical references to Lucent Technologies, a top technology firm during the dot.com era, that was cited by the SEC for fraudulent behavior associated with revenue recognition. Lucent quickly plummeted and went from one of the largest NYSE market cap companies to bankruptcy within 5 years from its peak.

Babson College Professor Dr. Joel Shulman the impact of drone strikes on Saudi oil fields and impact in financial markets. He notes that the large excess oil reserves will help stabilize the Market and minimize global concerns. He also points to the ability of other producers such as the U.S. and Iraq, who will be able to assume some of the burden as higher oil prices create incentives for high-cost producers (e.g. frackers) to enter production. Dr. Shulman adds that the somewhat muted response by Financial Markets this morning may be more focused on impending news expected from the U.S. Federal Reserve and China trade deal later this week. He also expresses concerns that the markets may not be pricing in risks associated with the potential for other, more damaging drone strikes or potential military conflict with Iran.

Babson College Professor Dr. Joel Shulman discusses the inversion of short and long-term interest rates as well as negative interest rates now occurring throughout Europe and Japan. He notes that the inversion of short and long-term interest rates are largely a function of investor hedging and demand for certain bond maturities and not anticipated economic recession. He mentions that this is not his major worry. By contrast, the negative interest rates that now sweep across Europe and Japan contribute to a reduction in GDP and economic recession. For example, Switzerland, Germany, France, Netherlands, and Japan all have negative interest rates that approach -1.2% for 5-year bonds. He suggests that negative interest rates, if brought to the US, will potentially wreak havoc on pension funds and other long-term investors, who need to build up assets to meet rising future liabilities. Dr. Shulman adds that continued interest rate reductions, that the Market may now be pricing into expectations, will only exacerbate problems faced by Pension Funds and other long-term investors.