Cover story: After 35 years at the helm of Berkshire Hathaway, Warren Buffett needs to share the limelight with his likely successor and the company’s many managers—because the company’s future success depends in part on removing doubts about future leadership.
Features: 1) A global trade war seems likely, posing a major risk to the stock market, and though little of the threat is reflected in stock and bond prices, investors need to pay attention and take steps to avoid a worst-case scenario; 2) An increase in media mergers is being driven by desperate attempts to catch up to NFLX, which many media giants could have easily acquired a few years ago—before its current $170B market cap; 3) Positive on AXL: Concerns about the company—including high debt, reliance on GM, and exposure to a near-term slowdown in North American vehicle demand amid electric-car growth—appear overstated of misplaced.
Tech Trader: Cautious on FB: Despite recent problems related to privacy and data-sharing, and low approval ratings in some consumer polls, Wall Street continues to love the stock, and much of the world continues to treat the site as indispensable.
Trader: Jason Pride of Glenmede says investors should focus on what’s good (the economy and earnings) and not on what’s bad (tariffs and rate hikes); Debt markets are giving off mixed signals, with high-yield corporate debt rallying while safe bonds languish, and returns are being driven not by outside forces but by factors specific to each asset class; Cautious on ELY: Shares could have more upside, says JPM analyst Steven Zaccone, but Barron’s says traders should think carefully before buying shares.
Profile: James Hamel, managing director at Artisan Partners and head of the Artisan Global Opportunities fund, looks for companies with franchise characteristics and improving profitability (top 10 holdings: INFO, V, Shiseido, BAC, STT, NBL, APTV, PXD, Temenos, BSX).
Interview: Diana Strandberg and Charles Pohl, who oversee the Dodge & Cox Global Stock fund, recently undertook a rigorous scrub-down of the fund’s investing thesis on nearly every stock (picks: Itau Unibanco Holding, Naspers, SNY, DISH, GOOGL).
Follow-Up: Cautious on CRSP, EDIT, NTLA: It’s hard to say whether the market is over- or under-valuing companies that use the gene-editing technology, but for now there’s no reason to sell. European Trader: With Italy’s political situation in turmoil, investors may want to buy beaten-down European banking shares that will likely jump when the clouds over the sector evaporate.
Emerging Markets: Some investors are growing bullish about emerging markets fixed income, saying much of the gloom and doom this year has been driven by idiosyncratic stories that mask strong fundamentals.
Commodities: “OPEC can claim success in its roughly 18-month-old effort to curb production, easing a global glut of supply and raising oil prices.
Streetwise: A sudden change of chief executive won’t necessarily harm a stock, but “prudent investors should keep a sharp eye on what’s happening in the C-suite.” Cover story: After 35 years at the helm of Berkshire Hathaway, Warren Buffett needs to share the limelight with his likely successor and the company’s many managers—because the company’s future success depends in part on removing doubts about future leadership.