This Week in Intelligent Investing

Unstoppable Automation Trend | Value Traps and IBM | Index Data Insights

October 24, 2020

In this episode, John Mihaljevic hosts a discussion of:

The implications of automation: Elliot Turner examines the megatrend of automation from both a societal and investment perspective. We discuss how automation is accelerating in new areas today. We explore the key investment implications and highlight several public companies.

The concept of value traps: Phil Ordway shares his perspective on the widely used term "value trap" and explains why investors may want to focus more on cash flow and less on stated earnings. We discuss what differentiates an undervalued business from a value trap and examine IBM as a case study.

Recap of stock market index data: Chris Bloomstran looks at the major U.S. stock market indices and their composition at the end of Q3, noting that the top five constituents of the S&P 500 Index have risen 38% YTD, on average, while the bottom 495 stocks have declined 5%, on average. We discuss the nuances of the unprecedented concentration of market cap in the largest companies.

Enjoy the discussion!

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