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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

CIO-Strategy-Bulletin-The-danger-of-growth-at-any-price

Perspectives

CIO Strategy Bulletin: The danger of "growth at any price"

David Bailin

By David Bailin

Chief Investment Officer

July 12, 2020Posted InFixed Income, Investment Strategy and Equities

There is talk of a bubble in technology stocks. Still, this is not a “Dot Com” repeat.  There is no tech sector recession in sight as there was in 2000.  That said, in 2020 we have seen a “lift-off” where market caps are trending upwards faster than free cash flow and profitability.

Fundamentally strong tech companies may end up a victim of their own success. Before the pandemic ends, investors must assess the sustainability of growth for many firms.  Rising Free Cash Flow (FCF) and profitability may be elusive relative to rising expectations.

We recommend an analysis of US large cap US tech-related holdings within portfolios to avoid total holdings exceeding 20% of portfolio wealth. For those with significant overweight we propose several strategies including selling the right to purchase a portion of the shares as an immediate income source, that can be used for further portfolio diversification.

Let the reporting games begin! Traders seeking outperformance from 2Q EPS results have a short-term focus. They often look to position themselves ahead of positive EPS surprises, strong guidance, and then sell on profitable trades. For long term investors we note that EPS surprises and returns over a mere 90-day investment period are barely correlated.

Read: CIO Strategy Bulletin

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