A New Leadership Group In Europe? by Jennifer Thomson, Gavekal Capital Blog
Year-to-date, the best performing sectors in developed Europe have been Consumer Discretionary (10.94%), Consumer Staples (10.78%), and Health Care (7.83%).
Charlie Munger: Invert And Use “Disconfirming Evidence”
Charlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More
Since the August low, the Energy sector has bested all others, gaining nearly 13%. Have we witnessed a dramatic change in leadership for the region? Probably not. What is interesting, though, is that Consumer Staples (and, to a lesser extent, Consumer Discretionary) has continued to perform well off the lows while Health Care has struggled the most–and is one of just three sectors to have gained less than 1% over the last month and a half:
These hard numbers confirm trends we have begun to notice in some of our point-and-figure charts.
Quite a few prominent Health Care names have violated important levels of support and appear to be at risk for further meaningful correction:
By contrast, companies from the Consumer Staples sector that have struggled for some time appear close(r) to more positive developments:
For now, the surge in the Energy sector in Europe (and the rest of the world) seems to represent a tendency to bottom-fish among the year’s most troubled stocks. We have our eye on the admittedly less glamorous, more long-term rotation between the region’s Growth Counter-Cyclicals as the dominance of Health Care stocks wanes and Consumer Staples companies find their technical footing, with room to improve.