Needless to say, you are reading the fourth edition of our annual thought leadership compendium in a much different environment than you did the previous one.
Though 2020 was a generationally poor period for value indexes relative to growth, hopes that the worst of the Covid-19 recession was behind us helped fuel a fourth quarter rebound in the mature, p
As long-term investors, we think it is important to take the right message from the strong broad market returns in 2020. As we’ve often cautioned, extrapolating trends is a risky way to commit capital, particularly when these trends reflect an extraordinary operating environment like that in 2020.
Although 2020 ended with the Covid-19 pandemic surging and the economic recovery from recession still far from complete, investment markets nonetheless maintained a state of exuberance that was not necessarily rational.
While equity markets continued their rebound from the depths of the Covid-19 selloff, leadership shifted as signs of a “reflation” trade that emerged in September persisted.
After clawing back its losses from the Covid-19 selloff throughout much of the second and third quarters, the high yield market moved solidly into positive territory for the year during the fourth quarter.
Those who think it’s possible to predict the future of economies and markets with any sort of accuracy would have a hard time explaining 2020—a year dominated by a black swan event that descended u
The price of gold has risen considerably over the past two years as real interest rates—to which the price of gold has historically been inversely related—have cratered.
While growth has outperformed value significantly since the global financial crisis, the two styles have traded leadership in recent decades and value has dominated over the long term.
Investors in search of a dependable income stream traditionally have looked to bonds and other fixed income assets for their consistent coupon payments and relatively low volatility.
At First Eagle, we subscribe to a notion once put forth by renowned investor Warren Buffet: “Price is what you pay; value is what you get.” By first defining the fundamental character of a business
Rather than committing to one market or the other, the highly selective investment approach used to manage the First Eagle Global Fund may serve as a bridge between the familiarity of domestic equi
The virus-related surge in unemployment has likely increased the share of households at risk of falling short in retirement.
Watch a replay of Matt McLennan on Bloomberg TV, where he shared his thoughts the potential shift in leadership within market and what he favors most within the value segment.
While growth stocks have continued to outperform, their market values in most cases have increased at a far greater rate than their revenue and cash flow.
The price of gold was pulled by many crosscurrents in the third quarter. The key factors included the advance and retreat of the coronavirus, positive and negative news about progress on a vaccine, the uncertain fiscal outlook, political tensions surrounding the US elections and the changing values of the dollar and the euro.
Though China fell into the first economic contraction in its modern history as a result of the Covid-19 pandemic, it has rebounded markedly and looks poised to be one of the few countries to post G
While many pundits have confidently expounded on industries they think will flourish/suffer under a new Biden or second Trump presidency, we believe the future of economies and investment markets c
Matt McLennan, head of First Eagle’s Global Value team, appeared on Fox Business to talk about the parallels between the 1960's and now, most notably in the fundamtenal transition in the currency markets.
Gold’s unique risk-return characteristics have given it the rare ability to maintain its real value in both inflationary and deflationary environments, while also serving as a potential hedge again
The integration of emerging markets into the global economy in recent decades has lifted hundreds of millions of people out of poverty.
Portfolio Managers Matthew McLennan, Kimball Brooker and Matt Lamphier discussed the ongoing market volatility, the impact it had on portfolio performance during the first
“Don’t fight the Fed.” This old adage has been proven right over many short time periods, second quarter 2020 the most recent among them.
Gold’s unique risk-return characteristics have given it the rare ability to maintain its real value in both inflationary and deflationary environments, while also serving as a potential hedge against extreme equity market drawdowns and thus a source of resilience for stock portfolios.
Entering 2020 there were a variety of indicators—including massive sovereign and corporate debt balances, the continued debasement of man-made money, and heightened political tensions.
While it’s true a large proportion of the “new economy” names that dominated markets in recent years call the US home, there is no shortage of companies worldwide whose combination of scarce assets
Portfolio Managers Matthew McLennan, Kimball Brooker and Matt Lamphier discussed recent market volatility and what may lie ahead.
On April 7, 2020, we spoke with Idanna Appio about recent market developments and the potential short- and long-term macroeconomic impacts of the coronavirus pandemic.
Investors initially downplayed news of the novel coronavirus outbreak in China, and equity indexes continued to press higher for the first weeks of 2020 as they did for much of 2019, led by growth-
The latest Social Security Trustees Report revealed that the program’s 75-year deficit had increased and the depletion of the Social Security trust fund continues to be projected for 2035.
Though equity indexes have bounced off their worst levels of 2020, Matt McLennan, head of First Eagle’s Global Value team, appeared on Bloomberg TV to caution that the full impact of the pandemic’s “gut punch” to the world economy may yet to be fully appreciated by markets.
The co-managers say times like these make the case to own gold strategically as a potential hedge and not as a bet for higher prices.
First the virus now the volatility. What’s next?
The shift from defined benefit plans to defined contribution plans over the past few decades has had an unexpected effect on Late Boomers
The coronavirus outbreak represents a significant shock to both supply and demand in China and is likely to have repercussions for both Chinese and global economic growth.
Portfolio Managers Matthew McLennan, Kimball Brooker
Watch Matt McLennan alongside Evercore ISI's Ed Hyman as they discuss what has changed in financial markets over the last year and what that means for the US and Global economies.
Equity markets have overcome their end-cycle anxiety to deliver impressive gains thus far in 2019. Given the magnitude of returns across stock markets globally, it is perhaps not surprising to see widespread reports of FOMO among investors.
At First Eagle, we’ve long held that the United States does not have a monopoly on good companies. While we think most market participants would agree with this sentiment, asset allocation data suggest US investors in general continue to be significantly underexposed to international equities relative to their share of the global opportunity set.
“One of the things that's important that we do a little bit differently at First Eagle, is we don't define value just in purely statistical terms."
Though the current business cycle—the longest in US history—is showing signs of age, the potential timing of and impetus for its end remain uncertain.
Conventional wisdom dictates that everyone should save as much as they can, as early as they can, for as long as they can in order to live a dignified life in retirement.
The long-simmering trade dispute between the US and China has intensified in recent days.
Nurtured by ever-cheaper computing power and the datafication of modern life, the rate of advancement in technologies based on artificial intelligence (AI) and offshoots like machine learning has a
It’s by design that companies in Matthew McLennan’s portfolios aren’t exactly those that set investors’ hearts racing with excitement. “We’re happy to own businesses with what we consider a gradual positive drift to them,” he says. In this article, Matthew McLennan and Kimball Brooker describe how they assess “fade risk” in a number of industries, what makes them uneasy about the state of the world today, why their exposure to gold is higher than normal, and why they see mispriced value in Fanuc, Orkla, Schlumberger, Jardine Matheson and Weyerhaeuser.
What is the wake-up call event that a retirement savings rate may be too low? Marriage!
Investors and consultants frequently ask for the Global Value team’s views on sustainable investing. While we do not offer strategies that focus in this area, we do pay close attention to issues of sustainability because they may be a key to a company’s resilience over the long term. Some investors see the energy sector as the antithesis of sustainability, but we see things differently. In this interview, Benj Bahr, energy-sector analyst on the Global Value team, explains why.
Do the individual savers take their spouses’ behavior into account when making their own savings decisions?
First Eagle’s Global Value team has adopted the value investment philosophy first developed by Benjamin Graham and later refined by Warren Buffett.
Over the last several years, the retirement landscape has markedly changed. Americans are living longer and need to plan accordingly. At the same time, with defined contribution plans replacing defined benefit plans both at corporations and, more recently, at public entities, individuals also need to shoulder greater responsibility for their own retirement saving.
We believe that First Eagle Funds are a natural fit for defined contribution plans because we believe in the key tenets of successful retirement plan investing. Our funds have distinctive risk/reward characteristics, and they have performed well in some periods when other investments were struggling.
Since Joseph Engelberger, “the father of robotics,” developed the world’s first industrial robots in the 1950s and installed them in a General Motors plant in 1961, the robotics industry has made tremendous advances. Today, there are about 1.9 million industrial robots deployed worldwide across a wide range of applications in fields such as manufacturing, logistics, consumer services, defense and healthcare.
Rising volatility spurs many investors to sell indiscriminately and, in particular, to flee stocks they see as underperformers. This fear-driven flight may send share prices down into bargain territory, where value investors can acquire them.
Managers who are given the flexibility to go anywhere and own out-of-benchmark stocks and who make independent investment decisions, in our view, are more likely to outperform over the long term.