[11/09/20 NEW] President Donald Trump’s Economic Scorecard (Podcast)

Who the U.S. president will be for the next four years is dominating the headlines right now, but what of the previous four? In the wake of the Nov. 3 election, host Stephanie Flanders discusses with some of the nation’s leading economists just how Donald Trump’s administration has changed America’s economy and how it interacts…

[10/28/20 NEW] When A Loss Isn’t Really A Loss

By Feng Gu and Baruch Lev This is earnings season, and companies reporting losses are a daily occurrence. But even prior to COVID-19, losses proliferated. In 2019, a full 46% of U.S. public companies reported an annual loss, and among high-tech and science-based enterprises losses reached an epidemic level of 70%. And this in the…

[09/11/20] The ESG Factor: A Contrarian View

How many times have ESG (corporate environmental, social, and governance activities) names popped up on your screen in recent years? Likely too many to count. It seems that these days everyone, from Al Gore to Larry Fink, urges companies to spend significant resources on various environmental and social causes and exhorts investors to plough money…

[08/24/20] Academics Attack ESG for Failure to Outperform During Crisis

By Amy Whyte In the aftermath of March’s coronavirus crash, numerous fund managers and data providers determined that companies with high ESG scores outperformed during the rapid sell-off — and a surge of money followed into funds focused on environmental, social, and governance issues. A new academic study, however, raises questions about the link between…

[08/09/20] Opinion: The nightmare continues for ‘value’ investors. Here’s why

By Brett Arends It’s the multi-trillion dollar question plaguing the markets and long-term investors everywhere. Why are so-called “value” funds sucking so badly? Value’ investing, which means buying stocks that are cheap in relation to today’s assets, income and dividends, was supposed to be a better, long-term strategy than the alternative, which is investing in…

[07/30/20] Value Investing Is Still Moribund

Summary There are still die-hards claiming that value investing will return to its former glory and that it’s a safeguard in times of crisis. We examined this claim for both the current crisis and the 2007-2009 financial crisis. The facts continue to disappoint. By Baruch Lev and Anup Srivastava In our widely debated paper (“Explaining…

[07/20/20] Should ESG Guide Investors In Crisis? The Evidence Says No

ESG—corporate environmental, social, and governance actions—is all the rage these days. Pundits, politicians, certain academics, and particularly vendors of ESG measures and corporate ratings claim that in addition to “doing good,” the stocks of companies with high ESG ratings outperform those with low ratings. Corporate ESG activities, they say, are both good for society and…

[07/03/20] Do Asset Write-Offs Matter? Not Really

Summary We are witnessing an avalanche of staggering asset write-offs by oil companies. Are these write-offs a signal to dump the stock? The bad news has often been baked in long before the write-off confirms it. On Tuesday, June 30, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B), a leading oil-and-gas company, announced it would take an asset write-off —…

[06/23/20] M&A’s In the Wake of Corona

By Feng Gu and Baruch Lev*             Mergers & acquisitions (M&A) activity came to a screeching halt almost half a year ago. Most acquisitions planned in late 2019 (like Charles Schwab’s intention to acquire TD Ameritrade, or Xerox’s plan to acquire HP) were abandoned or are on hold, and new ones are rare (United Technologies’…

[05/14/20] Going Concern Warnings: Should You Pay Attention?

Summary Doubts about the accuracy and reliability of going-concern warnings have lingered for years. A going-concern warning is, in fact, a prediction of future failure. But while such a warning should be an input to investment decisions, it’s not a deal-breaker. • On May 11, 2020, Chesapeake Energy (NYSE:CHK) issued a warning: “Management has concluded…