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Yahoo
2 days ago
- Business
- Yahoo
Fund-management veteran skips emotion in investment strategy
Fund-management veteran skips emotion in investment strategy originally appeared on TheStreet. This article is based on TheStreet's Stock & Markets Podcast, Episode 8. Hosted by the veteran Wall Street investor Chris Versace, the weekly podcasts are available early to members of TheStreetPro investing club. The podcasts are also available on YouTube. More than 40 years ago Tina Turner famously asked the world: "What's love got to with it?" If the subject is investing, David Miller has a simple answer: not much. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 Miller, chief investment officer of Catalyst Funds, spoke with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, in the June 4 edition, episode 8, of TheStreet Stocks & Markets Podcast, to talk about what his firm is looking for in a candidate for investment. "I think the sweet spot is where you have such a good business that even if people hate them they continue to grow and grow with high margins and high EPS growth," he said. Miller cited the billionaire entrepreneur, venture capitalist and political activist Peter Thiel, who advises founders and entrepreneurs to aim for a monopoly and avoid competition. "You're either in perfect competition or you have a monopoly or an oligopoly," he said. "And clearly, anyone who owns a business wants to be in that position where you have a monopoly rather than being in perfect competition."He described how airlines historically haven't even earned their cost of capital and frequently end up going bankrupt. Restaurants, he said, have very high fixed costs and "just never earn outsized economic profits." "Whereas you look at a company like a Visa () or Mastercard () or a Microsoft or an Apple or an Adobe () or an Nvidia," () Miller said. "Phenomenal businesses, phenomenal margins, great tailwinds, really strong free cash flows." So why invest in companies that aren't monopolies when many of the best returning stocks in history have turned into monopolies? "[Frankly,] you don't have to try to pick which stock is going to be the best stock," Miller said. "You can just take these categories that are far superior businesses and invest in those. That's the ideology behind that fund and why we launched it." Miller pointed to Apple () , explaining that "once you're in the Apple ecosystem, they own you." More Wall Street Analysts: Wells Fargo analysts reboot stock price targets after Fed action Apple analyst raises alarm about earnings, revenue growth Analyst initiates SoFi coverage, mulls loans, growth prospects "You don't have a whole lot of choices and they can get great margins," he said. "As someone who's been trapped in the Apple ecosystem willingly since 2005 I am perfectly content and happy," Versace responded. "I certainly understand why a lot of people love Apple," Miller said. "I have the iPhone. I like Apple and I don't particularly like Microsoft, but I'm definitely a customer of Microsoft. I think the best businesses are those where you'll do business with them even if you don't like them." Miller said Tesla () fits this dynamic, as the electric-vehicle maker "launched a new monopoly or an oligopoly depending on how you look at it certainly from a market share perspective." "Once you decide you're going to get an EV, it's a lot easier to go ahead and buy a Tesla and be part of their ecosystem than it is to ... buy an EV that's not part of that Tesla ecosystem," he added. Tesla shares have been thrashed lately — off 14% in regular trading June 5 — in light of Chief Executive Elon Musk's controversial involvement with the Department of Government Efficiency and backing of President Donald Trump. (The two have fallen out and Musk has rankled the White House by describing what the president called his "big, beautiful" budget bill as pork-laden and a 'disgusting abomination.') And while Tesla stock is down nearly 22% in 2025, it remains up about 60% from a year ago. Miller said the courts provide one of the most telltale signs of a monopoly. "Once the courts start coming after you for being a monopoly, that's a pretty good indication that you have some monopolistic characteristics in your business whether or not you want to admit it," he that historically been the targets of court action for their monopolistic characteristics have been phenomenal investments, he added. "If you look at a company like Microsoft, () if you got into [it when] the courts first came after them pretty hard, you'd be sitting pretty today," he said. Monopolies to avoid include electric and water companies. "If you're in a space where you have a product where your profits are regulated as to how much return on equity you can actually generate, we avoid those because what we want to go for is those that are growing monopolies." And Miller prefers to leave emotion out of the equation. "If people like a product, that's great," he said, "but what I really prefer is that they need the product rather than they like the product, and that there's some growing demand around it."Fund-management veteran skips emotion in investment strategy first appeared on TheStreet on Jun 6, 2025 This story was originally reported by TheStreet on Jun 6, 2025, where it first appeared. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Miami Herald
3 days ago
- Business
- Miami Herald
Fund-management veteran skips emotion in investment strategy
This article is based on TheStreet's Stock & Markets Podcast, Episode 8. Hosted by the veteran Wall Street investor Chris Versace, the weekly podcasts are available early to members of TheStreetPro investing club. The podcasts are also available on YouTube. More than 40 years ago Tina Turner famously asked the world: "What's love got to with it?" If the subject is investing, David Miller has a simple answer: not much. Don't miss the move: Subscribe to TheStreet's free daily newsletter Miller, chief investment officer of Catalyst Funds, spoke with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, in the June 4 edition, episode 8, of TheStreet Stocks & Markets Podcast, to talk about what his firm is looking for in a candidate for investment. "I think the sweet spot is where you have such a good business that even if people hate them they continue to grow and grow with high margins and high EPS growth," he said. Miller cited the billionaire entrepreneur, venture capitalist and political activist Peter Thiel, who advises founders and entrepreneurs to aim for a monopoly and avoid competition. "You're either in perfect competition or you have a monopoly or an oligopoly," he said. "And clearly, anyone who owns a business wants to be in that position where you have a monopoly rather than being in perfect competition." Related: Adviser who thrived on Black Monday sends warning on tariffs' next victim He described how airlines historically haven't even earned their cost of capital and frequently end up going bankrupt. Restaurants, he said, have very high fixed costs and "just never earn outsized economic profits." "Whereas you look at a company like a Visa (V) or Mastercard (MA) or a Microsoft or an Apple or an Adobe (ADBE) or an Nvidia," (NVDA) Miller said. "Phenomenal businesses, phenomenal margins, great tailwinds, really strong free cash flows." So why invest in companies that aren't monopolies when many of the best returning stocks in history have turned into monopolies? "[Frankly,] you don't have to try to pick which stock is going to be the best stock," Miller said. "You can just take these categories that are far superior businesses and invest in those. That's the ideology behind that fund and why we launched it." Miller pointed to Apple (AAPL) , explaining that "once you're in the Apple ecosystem, they own you." More Wall Street Analysts: Wells Fargo analysts reboot stock price targets after Fed actionApple analyst raises alarm about earnings, revenue growthAnalyst initiates SoFi coverage, mulls loans, growth prospects "You don't have a whole lot of choices and they can get great margins," he said. "As someone who's been trapped in the Apple ecosystem willingly since 2005 I am perfectly content and happy," Versace responded. "I certainly understand why a lot of people love Apple," Miller said. "I have the iPhone. I like Apple and I don't particularly like Microsoft, but I'm definitely a customer of Microsoft. I think the best businesses are those where you'll do business with them even if you don't like them." Miller said Tesla (TSLA) fits this dynamic, as the electric-vehicle maker "launched a new monopoly or an oligopoly depending on how you look at it certainly from a market share perspective." "Once you decide you're going to get an EV, it's a lot easier to go ahead and buy a Tesla and be part of their ecosystem than it is to ... buy an EV that's not part of that Tesla ecosystem," he added. Tesla shares have been thrashed lately - off 14% in regular trading June 5 - in light of Chief Executive Elon Musk's controversial involvement with the Department of Government Efficiency and backing of President Donald Trump. (The two have fallen out and Musk has rankled the White House by describing what the president called his "big, beautiful" budget bill as pork-laden and a "disgusting abomination.") And while Tesla stock is down nearly 22% in 2025, it remains up about 60% from a year ago. Miller said the courts provide one of the most telltale signs of a monopoly. "Once the courts start coming after you for being a monopoly, that's a pretty good indication that you have some monopolistic characteristics in your business whether or not you want to admit it," he said. Related: Tesla analysts raise red flag about rivalry, consumer interest in key market Companies that historically been the targets of court action for their monopolistic characteristics have been phenomenal investments, he added. "If you look at a company like Microsoft, (MSFT) if you got into [it when] the courts first came after them pretty hard, you'd be sitting pretty today," he said. Monopolies to avoid include electric and water companies. "If you're in a space where you have a product where your profits are regulated as to how much return on equity you can actually generate, we avoid those because what we want to go for is those that are growing monopolies." And Miller prefers to leave emotion out of the equation. "If people like a product, that's great," he said, "but what I really prefer is that they need the product rather than they like the product, and that there's some growing demand around it." Related: Veteran fund manager who forecast S&P 500 crash unveils surprising update The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
17-05-2025
- Business
- Yahoo
Advisor who thrived on Black Monday sends warning on tariffs' next victim
People who were there said it felt like an earthquake. They used words like "surreal" and "unsettling," and said there was a sense of impending doom. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 This was Oct. 19, 1987, also known as Black Monday, the largest one-day percentage decline in the history of the Dow Jones Industrial Average. The massive sell-off resulted in roughly $500 billion in market capitalization vanishing and a lot of mighty scared people. But Louis Llanes wasn't one of them. "No, no, no," the portfolio manager and TheStreet Pro contributor insisted. "It got me excited because I actually was at that time more involved with more thinking global macro. You could be short, you could be long, you could be commodities, stocks, bonds, currencies." Llanes, founder of Wealthnet Investments, LLC and author of The Financial Freedom Blueprint, shared his views about a variety of market-related topics with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, in the May 15 edition of TheStreet Stocks & Markets Podcast. "So, I've been in a lot of different areas in the business," he said. "I started off on the sales side, where you're going out and finding clients. And I learned very quickly at that time that many of the incentives at the larger Wall Street firms were not necessarily aligned with making money." More Wall Street Analysts: Analyst reboots Apple stock price target ahead of earnings Analyst unveils surprising Tesla stock target after Musk's remarks Analyst raises eyebrows with Amazon stock price target "We had all the research," he added. "I was, like, this doesn't make sense. I'm in this business to make money." As far as people who are just coming to the market, Llanes said he sees two types of newer investors. "One wants to do it themselves, is interested in it, and highly capable of doing it themselves," he said. "Maybe they're an engineer or something like that. Their psychology is different than, say, somebody who's got a job. They're a manager or something like that, and they don't have time for that. You have a different kind of a view on how to do things." Llanes advises people generally to continue investing based on the long term. "It depends on how old you are," he said, "but to have more of a longer term view and to have one based on an investment strategy that's based on economics, not on emotion. The biggest problem you get is, for example, let's say you're a doctor, you're going to hear all sorts of things in the operating table or when you're doing whatever." "And those clients that I have that are in those fields, they tend to have all sorts of things like, hey, 'what do you think of this?'" Llanes added. "They're hearing all these things and people will talk about, all the things that they made money on. Nobody talks about the things that they lose money on." Remember, he said, "the people who are talking a lot about how much money they made on something probably aren't doing as well as you think they are." Llanes said that the old adage about letting your profits run and cutting your losses short is probably the most important rule in investing. "As soon as you know you're wrong, get out," he said. "And if you're not sure, if things are working out in your favor, be a little bit apprehensive or a lot apprehensive to just unload that security." The conversation turned President Donald Trump's scattergun tariff plan that has gone through several personality changes since the April 2 "Liberation Day" said that he expected from the very beginning that tariffs would be rolled back "because it was a shock that came to the system on the approach." "There's a difference between how the initial communication went to the public on how we were going to deal with tariffs," he said. "Right on its face, we knew it wasn't feasible. So we knew there'd there would be some pulling back." While Llanes thinks the negotiations will be more on the normal side, the initial approach was good since it got a lot of people talking very quickly, and "the ball is moving a lot faster" now than the traditional country-by-country method. "So, in terms of as an investor, I think that the biggest thing is that you just have to understand that there's going to be winners and losers in this." he said. Llanes' said all of the trends are pointing toward interest rates staying higher. "Nobody really knows how the tariffs are going to work out," he said. "I mean, we're still working through it. The tariffs won't be as inflationary as the alarmists are saying." Llanes believes the other part of the equation, which will see more investment in the U.S., will continue to increase. "That will hold up interest rates," he said. "And I think that's going to affect the real fast-growing companies that are way overvalued. They're going to struggle, I believe."
Miami Herald
16-05-2025
- Business
- Miami Herald
Advisor who thrived on Black Monday sends warning on tariffs' next victim
People who were there said it felt like an earthquake. They used words like "surreal" and "unsettling," and said there was a sense of impending doom. Don't miss the move: Subscribe to TheStreet's free daily newsletter This was Oct. 19, 1987, also known as Black Monday, the largest one-day percentage decline in the history of the Dow Jones Industrial Average. The massive sell-off resulted in roughly $500 billion in market capitalization vanishing and a lot of mighty scared people. But Louis Llanes wasn't one of them. "No, no, no," the portfolio manager and TheStreet Pro contributor insisted. "It got me excited because I actually was at that time more involved with more thinking global macro. You could be short, you could be long, you could be commodities, stocks, bonds, currencies." Llanes, founder of Wealthnet Investments, LLC and author of The Financial Freedom Blueprint, shared his views about a variety of market-related topics with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, in the May 15 edition of TheStreet Stocks & Markets Podcast. "So, I've been in a lot of different areas in the business," he said. "I started off on the sales side, where you're going out and finding clients. And I learned very quickly at that time that many of the incentives at the larger Wall Street firms were not necessarily aligned with making money." More Wall Street Analysts: Analyst reboots Apple stock price target ahead of earningsAnalyst unveils surprising Tesla stock target after Musk's remarksAnalyst raises eyebrows with Amazon stock price target "We had all the research," he added. "I was, like, this doesn't make sense. I'm in this business to make money." As far as people who are just coming to the market, Llanes said he sees two types of newer investors. "One wants to do it themselves, is interested in it, and highly capable of doing it themselves," he said. "Maybe they're an engineer or something like that. Their psychology is different than, say, somebody who's got a job. They're a manager or something like that, and they don't have time for that. You have a different kind of a view on how to do things." Llanes advises people generally to continue investing based on the long term. "It depends on how old you are," he said, "but to have more of a longer term view and to have one based on an investment strategy that's based on economics, not on emotion. The biggest problem you get is, for example, let's say you're a doctor, you're going to hear all sorts of things in the operating table or when you're doing whatever." "And those clients that I have that are in those fields, they tend to have all sorts of things like, hey, 'what do you think of this?'" Llanes added. "They're hearing all these things and people will talk about, all the things that they made money on. Nobody talks about the things that they lose money on." Remember, he said, "the people who are talking a lot about how much money they made on something probably aren't doing as well as you think they are." Llanes said that the old adage about letting your profits run and cutting your losses short is probably the most important rule in investing. "As soon as you know you're wrong, get out," he said. "And if you're not sure, if things are working out in your favor, be a little bit apprehensive or a lot apprehensive to just unload that security." The conversation turned President Donald Trump's scattergun tariff plan that has gone through several personality changes since the April 2 "Liberation Day" announcement. Related: Veteran investor turns heads with bear market advice Llanes said that he expected from the very beginning that tariffs would be rolled back "because it was a shock that came to the system on the approach." "There's a difference between how the initial communication went to the public on how we were going to deal with tariffs," he said. "Right on its face, we knew it wasn't feasible. So we knew there'd there would be some pulling back." While Llanes thinks the negotiations will be more on the normal side, the initial approach was good since it got a lot of people talking very quickly, and "the ball is moving a lot faster" now than the traditional country-by-country method. "So, in terms of as an investor, I think that the biggest thing is that you just have to understand that there's going to be winners and losers in this." he said. Llanes' said all of the trends are pointing toward interest rates staying higher. "Nobody really knows how the tariffs are going to work out," he said. "I mean, we're still working through it. The tariffs won't be as inflationary as the alarmists are saying." Llanes believes the other part of the equation, which will see more investment in the U.S., will continue to increase. "That will hold up interest rates," he said. "And I think that's going to affect the real fast-growing companies that are way overvalued. They're going to struggle, I believe." Related: Veteran fund manager who forecast S&P 500 crash unveils surprising update The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
03-05-2025
- Business
- Yahoo
Veteran trader gives advice on how to navigate through volatile markets
Bob Byrne likes to keep it simple. In this week's TheStreet Stocks & Markets Podcast, the veteran trader and TheStreet Pro contributor shared his thoughts with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, about investing strategy, with a particular focus on navigating a volatile stock market. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 "I am a very, very basic, basic trader," Byrne said. "I don't use a bunch of doesn't have to be complicated." Byrne, who describes himself as a long-term investor and short-term swing trader, If says that if you insist on indicators, he suggests some moving averages, which traders use to smooth out price fluctuations and identify trends in an asset's price activity. "If you're a short term trader, something like a five- or eight-period simple moving average and a 20- or 21-day," he said. As for longer-term investors, Byrne recalled some advice he had heard: Good things tend to happen above a 200-day moving average and bad things tend to happen under it. "It's a really simple way to look at things," he explained. "I'm not saying you've got to bail on everything under a 200-day moving average. And I'm not saying buy it above it. But it's a very good litmus test to begin." More Wall Street Analysts: Analyst reboots Apple stock price target ahead of earnings Analyst unveils surprising Tesla stock target after Musk's remarks Analyst raises eyebrows with Amazon stock price target Versace asked Byrne how he was navigating the market in the near term. "If there's not a lot of volatility, I'm not trading it," he said. "In my 20 years of day trading, there were two groups of people. There were the people that traded in the first two hours and maybe the last 90 minutes of the day. They typically made money." "Then there were the people that traded all day, every day." When you take that approach, he warned, "you're going to make mistakes." "You're going to see patterns where patterns don't exist," he said. "I think that's what we are right now in the market as well. When a market compresses back down, there's not a lot of sense to most strategies. If you have a strategy that works in it, you can see it in your own results." Most people need volatility and price moves, Byrne said. "I need it," he said. "I think volatility is going to be back in another week or two. I don't know." "Why that time frame?" Versace asked. "We've rebounded sharply," Byrne said. "I don't know if we're in a bear market, but we're certainly in a bear pulse, if you will. What's been settled? There's no clarity." Versace said that "for folks, it's really easy to deal with stocks that are doing well for them. But in a challenging market, how do you handle? I guess the only way to call it is a call gone wrong?" Byrne's investing advice is straightforward: If you buy something without knowing where you're wrong and where you're out, you shouldn't have bought it in the first place. "And I think that kind of realization comes from getting stung a whole bunch of times when you start out as a trader," he said. "When I started, I was in college and I had a string of probably eight, nine months where I was doing great." "I thought I knew everything," he added. "It turned out I didn't know anything and ended up losing half my account in virtually one trade. I have never made that mistake again."The fund manager and the trader make clear: It's about discipline and managing risk. Byrne cited the poker player's "chip and a chair" motto, which says that as long as you have a chip and a seat at the table, you're still in the game. "Don't ever make a bet that pushes you out of the game, both from a monetary standpoint and a psychological standpoint," he said. "How do you react to things? For me personally, I feel far more pain when I lose than pleasure when I win." "It helps me avoid a lot of situations that I'll miss out on opportunities. So, if I can't identify precisely where I believe I'm wrong based on why I'm getting in, I don't take the trade." If you have a longer term position, Byrne said, you have to ask deeper questions. "Why is the volatility there?" he asked. "And if the volatility is there because it has a high beta, then you just have to be willing to navigate that." A high beta stock is one that moves more sharply than a broad-market index like the S&P 500. Versace says that Byrne is effectively saying that if you're trading, "you really need to check your emotions at the door." "You can't have any. It's pretty easy," Byrne says, adding that a trader's job is "to identify when something's not working and get out. You can always get back in ... unless you're moving, in some cases, billions of dollars. It's the greatest ability of the individual investor or traders that you can get in and out in a split second."Sign in to access your portfolio
