Highly-rated global investor, Sarah Ketterer, Portfolio Manager of Causeway International Value Fund explains why there is still plenty of value to be found in overseas markets.
Sarah Ketterer: International Value
Listen to the audio only version here:
How Warren Buffett Uses Discount Rates To Value Stocks
Warren Buffett has never detailed the process he uses to value the businesses he acquires for Berkshire Hathaway. However, over the years, he has provided some limited insight into his methods. Q3 2020 hedge fund letters, conferences and more Based on these comments, it is widely assumed that Buffett uses a discount cash flow model Read More
For those of us looking for income from our investments, (and who isn’t?), the latest report from veteran investment strategist Sam Stovall is sobering.
Stovall warns income-oriented equity investors to expect “…pincer-like pressure from rising short- term interest rates and the reduction in stock dividend increases.” That latter prediction caught my attention. At this point most of us yawn at forecasts of higher interest rates. We have been waiting for years for them to happen. But until this year dividend oriented investors have been benefitting from five years of double digit increases in dividend payouts.
According to Stovall the latest indications are that “…dividend net increases, (increases less decreases) for U.S. domestic common stocks totaled $6.0 billion during Q3 2016”. This was a decrease from both the quarter before and the same quarter a year ago.
And here’s the kicker! “For the 12-month period ending Sept. 2016, net increases fell nearly 56% to $20.8B vs. a $47.1B increase ending September of 2015?. Ouch!
If you can’t continue to look forward to robust dividend increases, where will positive stock returns come from? When all the third quarter reports are out, Wall Street analysts expect S&P 500 earnings will have experienced their fifth consecutive quarterly decline.
This week’s guest, Sarah Ketterer is not discouraged by these trends. Ketterer is a global value investor with an excellent long-term track record. She is Chief Executive Officer of Causeway Capital Management which she co-founded in 2001 and now has more than $40B dollars in assets under management.
Ketterer is portfolio manager for the firm’s Fundamental and Absolute Return Strategies, including five of Causeway’s six mutual funds. She and her team at the flagship Causeway International Value Fund were nominated for Morningstar’s International Stock Fund Manager of the Year award for 2013. The fund which has a Morningstar analyst rating of gold is a perennial favorite of the research firm.
Since this is Ketterer’s first WEALTHTRACK appearance I started with the basics, and asked her to describe what value investing means at Causeway.
If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Ketterer which can be seen exclusively on our website. Also, a reminder that WEALTHTRACK is available as a YouTube Channel, so if you are unable to join us for the show on television, you can watch it on our website, WealthTrack.com, or by subscribing to our YouTube Channel.
Have a great weekend and make the week ahead a profitable and productive one.
Consider Some Preferred Stocks For Your Portfolio
- A kind of hybrid security, sits between bonds and stocks in company’s capitalization structure
- Junior to bonds, but senior to common stocks in claims on assets
- Currently yield more than investment grade bond equivalents
- Bond interest is taxed at regular personal income tax rate
- Most preferred stock dividends taxed at lower long-term capital gains rate
Burt Malkiel’s: “The ‘Preferred’ Path to Higher Returns”
Sarah Ketterer: Reinventing Healthcare
United HealthGroup Inc Price: $145.25 on 10/19/16 52-week range: $107.51 – $146.36
Election Investment Impact?
In the lead up to the U.S. presidential elections we have been asking all of our guests for their perspectives on the potential investment impact. Highly regarded global value investor Sarah Ketterer is focusing more on overseas elections than what is happening in America.