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Diligence Institute

Highlights From New Constructs Investment Research

Best & Worst ETFs and Mutual Funds: Large Cap Blend Style

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The Large Cap Blend style ranks first out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 33 ETFs and 908 mutual funds in the Large Cap Blend style as of October 17, 2013. Prior reports on the best & worst ETFs and mutual funds in every sector and style are here.

Minority Interests – Valuation Adjustment

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We subtract the fair value of the minority interest liability from shareholder value in our DCF model as the minority interest shareholders have the rights to that portion of the cash flows. Without careful research, investors would never know that these minority interest liabilities distort GAAP numbers.

Danger Zone 6/10/13: “Passive” Investors

Danger Zone 6/10/13: “Passive” Investors Read More

Passive investors are in the Danger Zone for not recognizing that they are actually active investors.

“Index” Label Myths

“Index” Label Myths Read More

The word “index” in an ETF label does not always mean that investors are getting the specific exposure they seek. Diligence on ETF holdings is necessary despite what the providers might have you believe. Below I dispel the following myths concerning index ETFs.

See How Diligence Paid In 2011

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Everyone wants diligence. Few will ever turn it down. The problem is that diligence is expensive. New Constructs makes diligence cost-effective.

Get Off the SBUX Bandwagon Before It Crashes

Get Off the SBUX Bandwagon Before It Crashes Read More

Be wary of advice from the bandwagon riders. They care more about getting more people in the bandwagon than anything else.
The Starbucks (SBUX) bandwagon is a big one. I am not on it. vs New Constructs = Hype vs Substance vs New Constructs = Hype vs Substance Read More

When I ran across the recent article “270,033 pages later, a chance to catch our breath…”, I could not help but admire’s marketing moxy.
The article provides a count of the number of pages of 10-K filings that have poured in during the real earnings season. It also highlight a couple of the largest filings. At first glance, it is easy for one to assume that all of the 270,033 pages were also analyzed.

The Real Earnings Season Begins Now

The Real Earnings Season Begins Now Read More

Nearly all of the invest­ing world ignores 10-K sea­son. 10-Ks contain the most important financial information that companies provide all year.

The Fed’s Bazooka: Revealed As Final Policy Firepower in Jackson Hole

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No more Mr. Nice Guy. It is time for Mr. Bernanke to break out the big guns in Jackson Hole this Friday.

Don’t Gamble In Financial Sector ETFs

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The financial sector is one of four sectors to earn our “dangerous” rating and is the worst-ranked sector in the our 3Q11 Sector Roadmap report according to my methodology at New Constructs.

Sell Morgan Stanley Before It Sells You Down the River

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When Morgan Stanley (MS) started in 1935, there were around fifteen employees. For 2010, the company reported 62,542 employees. Bigger is not always better. And for big, publicly-traded companies, big tends to be worse especially when it comes to financial reporting.