Resumo de New Markets,new Strategies

New Markets, New Strategies, is an exciting book by Jason Trennert, the hands on sell side strategist who practices what he preaches. Trennert utilizes his vast experience to analyse the ups & downs of the Market with specific references to the Oil Shock (1973-74), the great crash of 1987 and the Peak and fall of 2000-2002.
John D Rockefeller said ?Do you know the only thing that gives me pleasure? It?s to see my dividends coming in.? But many companies were not paying dividends / paying very low dividends to the investors citing high taxation (till 2003). Companies like McDonald?s suffered stock valuation drops due to this. But they corrected their strategy / paid dividends and their stock price has improved since then. Trennert asserts there will be greater reliance on dividends to boost the total shareholder return.
The Hedge funds are no longer the province of the elite money managers or the affluent few. The impact of these largely unregulated, even mysterious investment vehicles cannot be underestimated. Hedge funds account for nearly 35-40% of market?s volume and commissions and are attractive mainly because of the high returns they offer to the investors. Their current high growth may be slowed down due to regulatory concerns, ability to maintain the minimum High Water Mark return continuously.
The geopolitical developments in the world viz., terrorist acts, war etc have great impact on the Administration?s policy due to the security implications of horrific events like 9/11. The Iraq war and war against terrorism are going to be critical in the market growth. However, the opportunities of US industry?s involvement in reconstruction of Iraq and also the investment opportunities in US defense industries (on account of uptrend in the R & D investments) is clearly present.
Corporate Governance has a critical bearing on the investors? fortunes. Economic freedom makes the investors vulnerable to bad intentions of corporate scams. However, it history has shown that a democratic system with free markets can reform itself very quickly. It is almost the case of history repeats itself, when Enron happened in 2002, we are reminded of 1911 break up of Standard Oil by the Roosevelt administration to curb the growing power of large company. Legislation like the Sarbanes-Oxley and Regulation G are the new developments which are likely to ensure better corporate governance in the future.
Chapter 5 examines the impact of free trade and technological innovation and globalization. The growing manufacturing might of China will definitely affect US companies and workers. The current per capita consumption of goods in China is much less compared to that of US and a nouve rich China can offer tremendous potential as end market for US goods and services. This can be a boon for US industries.
The falling reputation of the Wall Street analysts and the importance of unbiased, independent research for investor profitability are covered. In Chapter 7, Trennert goes against the tide by actively advocating the Contrarian approach to investing for profits.
?A Good Company need not be a Good Investment?. This has been realized by many investors and Chapter 8 provides a practical tool to compare companies across sectors to value them properly before investing.
Finally, Trennert unveils the plan, The Thrifty Fifty Portfolio, to pick the right stocks while keeping the big picture of investment themes / industry scene in mind and spells out the advantages of active management.

This book is a must read for anyone interested in investing and making money in the stock markets. While the backdrop is of US markets, the rules are equally applicable anywhere in the world!

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