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Daily roundup up of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Citi strategist Scott Chronert has developed a stock picking methodology called Quant Crowding Composite (QCC) that measures individual equities by fund overweight and underweight positioning, valuations, short interest, stock ratings and macroeconomic risk. Mr. Chronert listed the most and least attractive stocks by these measures in a Monday report.

Well-known names on the most attractive list – underweighted stocks with lower risk and valuations – include Lockheed Martin Corp., Seagate Technology PLC and Emerson Electric Co. The list of least promising stocks by QCC has Morgan Stanley, Citrix Systems Inc. and Exxon Mobil Corp.

“@SBarlow_ROB C: Most attractive stocks by Quant Crowding Composite” – (full table) Twitter

“ @SBarlow_ROB C: Least attractive U.S. stocks by Quant Crowding Composite” – (full table) Twitter


The stock market should theoretically democratize corporate wealth, but in the U.S. it’s not turning out that way with the richest one per cent of the population owning half of the equity market. This is becoming a political problem. It’s not hard to imagine a new liberal president enacting measures that would crush the stock market because the vast majority of Americans wouldn’t be affected.

Here’s the Financial Times,

“The richest 1 per cent of Americans now account for more than half the value of equities owned by US households, according to Goldman Sachs. Since 1990, the wealthiest have bought a net $1.2tn in company stakes, while the rest of the population has sold more than $1tn… As of September 2019, the bottom 90 per cent owned $4.6tn of equities, or 12 per cent of the total, the analysts noted… the broad US stock market has climbed more than tenfold since 1990 — gains that have mostly accrued to the richest part of the population.”

I would, of course, love to see similar data for Canada .

“How America’s 1% came to dominate equity ownership” – Financial Times (paywall)


BofA Securities (formerly BofA Merrill Lynch) published an exhaustive research report on global supply chains that should be a must-read for Canadian governments at all levels,

“In a survey we conducted of our analysts who cover 3000 companies, we found that companies in more than 80% of 12 global sectors (USD22tn market cap) in each of North America, Europe and Asia-Pacific (ex-China) have implemented or announced plans to shift at least a portion of their supply chains from current locations… South East Asia and India were the planned destinations for half of North American and Asian supply chains. Much more surprising was that companies in about half of all global sectors in North America declared an intent to 'reshore'. This was particularly true for high-tech sectors and industries for which energy is a key input. If borne out, this could represent the first reversal in a multi-decade trend.’

If reshoring to North America is a new trend, domestic competitiveness as an investment destination for global corporations goes from a really important issue to a really, really, really important issue.

“@SBarlow_ROB BoA report on global supply chain evolution makes Canadian competitiveness even more important than it’s been” – (research excerpt) Twitter


Column: “Rising stocks, plunging commodities. How investors can make sense of the coronavirus impact on markets” – Barlow, Inside the Market

Newsletter: “Don’t let your risk tolerance drift higher – not even in real estate” – Globe Investor

Diversion: “The history and economics of Mexican drug cartels’ – Marginal Revolution

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