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Fishing Holes for CatSharks

News Quality and Sources

People consume their information in all sorts of ways from a wide variety of sources. Here’s our view on the various major news sources for financial information and the eleven economic sectors because where you fish impacts what you catch!

Broadcast Media

In cable television, there are three main options:

CNBC

  • Feels like a 1990’s broadcast with an old-fashioned market ticker. There are some good programs like Squawk on the Street, but most info is day-trader focused which conflicts with our approach. Investing is not a high energy practice the way Jim Cramer rants and raves, but rather a more thoughtful process. We need a thoughtful broadcast.

Fox Business

  • If you want a huge dose of politics instead of facts and figures related to profits and valuation, then Fox is your station. We want the data without political taint, so we leave more frustrated than informed. Really, who cares which companies still embrace DEI practices? If it works, do it.

Bloomberg

  • The original Bloomberg terminal still dominates Wall St. as the most comprehensive and independent data provider. Their TV station does the best job in our view of continuing that information stream in useful ways. Shows we bookmark include Real Yield and Wall Street Week. By far the best broadcast and our default for each work day.
  • Also available on Sirius/XM, too.

For podcasts, we also recommend but do not necessarily agree with any of the following:

  • Anything from Bloomberg
  • Anything from Goldman Sachs
  • Anything from The Wall Street Journal
  • We Study Billionaires
  • Invest Like the Best with Patrick O'Shaughnessy
  • The Peter Schiff Show Podcast
  • Wall Street Breakfast
  • Wall Street Vision
  • The Watchdog on Wall Street

Finally, on YouTube, we recommend as good sources:

  • Bloomberg
  • The Motley Fool (they do lots of value analysis)
  • Wall Street Journal

Print Media/Websites

From the print realm to virtual, we have all manner of publications from old fashioned Barron’s to dedicated websites like The Motley Fool, Market Watch and Seeking Alpha. All of them want to sell you services and some provide very good information and analysis.

Traditionally, The Wall Street Journal (WSJ), The Economist, and Bloomberg are the default sources for independent reporting. The reporting is often the most in depth as opposed to publications like Barron’s, Market Watch and Investor’s Business Daily. While these and other print media do an OK job, nothing beats the depth of the big three.

How We Digest Information

It’s one thing to absorb data and another to use it. Our discipline is best described as top down. We start with the overall economy and the two most likely scenarios over the next part of an economic cycle.

Note: Our economy moves in predictable cycles of expansion and contraction. All we lack are the specifics like when, how much and for how long. It’s the lacking that creates so much uncertainty and risk for investors.

Next, we briefly explore the eleven economic sectors we cover:

Information Technology

The most volatile and hardest to invest for lower risk. We prefer infrastructure, consulting and great management.

Financials

Covers mostly banks and insurance companies. We prefer conservative management and strong credit practices to minimize bad problems.

Health Care

Ranges from hospitals to pharmaceuticals to equipment. Highly regulated and we have limited expertise here.

Consumer Discretionary

Larger consumer purchases like cars, heating systems, etc. Tends to do best when the economy is growing.

Communication Services

Ranges from broadcast media to telephone providers. Broadcast is riskier than most telecommunications.

Industrials

Manufacturers who tend to service other businesses like RTX making engines for Boeing planes which are made for airlines. Both Boeing and RTX are industrials. These tend to be cyclical.

Consumer Staples

Things we buy everyday like cereal and clothing. Tends to be more stable over time.

Energy

This includes both fossil fuels and renewable energy providers as well as transport to utilities or direct end users. Exploration is far riskier than transport or end users.

Real Estate

A very wide asset class that serves all the sectors plus residential homes. Covers both direct ownership as well as lending to real estate and the vast majority of all companies are registered as Real Estate Investment Trusts (REIT).

Materials

This includes basic economic inputs or commodities like iron ore, wheat and gold. These include everything from the extraction to processing and delivery to end users. Individual materials can be very volatile whereas a diversified materials portfolio tends to be more predictable.

Utilities

Provides homes and offices with services like gas, electricity and water. Tends to be among the lowest risk businesses due to regulation and natural monopoly

 

Finally, we look for companies who are most likely to benefit from the current or future economic environment while also reducing our risk through meaningful dividends.

Our three-step analytic process includes many smaller steps where we look at each potential investment across a variety of measures and tests that are too long to list here.

Information Quality Matters

When we put our money to work, other than avoiding certain businesses on moral or ethical grounds, we should be as unemotional as a shark searching for food, but picky as a cat when deciding what to eat. That’s right, we’re Catsharks – a cartoon that will never exist, and a great discipline.

We track more than 700 potential meals inside our territorial waters, but only 5-10 are attractive to our fussy feline taste at any time. If we could not rely on the quality of the information we review about those meals, how awful would our health be today?

Be a CatShark!

Life UnLocked Partners, LLC is a Registered Investment Advisor (RIA) registered with the state of California, providing investment advisory services where registered or exempt from registration. Registration does not imply a certain level of skill or training. Investing involves risk, including potential loss of principal. Past performance is not indicative of future results. This material is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. For more information, please request our Form ADV or visit www.lifeunlocked.partners.