Vaccine market madness — 4 investing pillars from the world's top stock-picker — Don't fret the value rotation

Dear Readers,

Did you enjoy Moderna Monday, which saw the Dow surge to all-time highs on positive vaccine news? Or perhaps you were more of a fan of the prior week's manic Monday, when Pfizer's trial efficacy sent the index soaring as much as 1,610 points.

Regardless of your preference, the market is clearly loving any sort of positive vaccine data. After months of yearning for signs of an accelerated economic recovery and overall return to normalcy, investors are finally getting something to cheer about — and they've reacted by smashing the buy button.

These dynamics have shifted the market landscape and created new opportunities for bold investors. Right off the bat, Jefferies published a list of 21 vaccine-adjacent stocks they say are still underappreciated and poised for huge gains. Then Evercore came out with its own compilation of 16 stocks they see as post-virus bounceback candidates.

If you aren't yet a subscriber to Insider Investing, you can sign up here.

On a more zoomed-out macro basis, Goldman Sachs quickly weighed in with a call for a vaccine-driven 20% stock rally, and three trades to make now in anticipation. Not to be outdone, Morgan Stanley's top cross-asset strategist pinpointed three areas of the market set to directly benefit from a successful vaccine.

And you won't want to miss Business Insider's vaccine-investing greatest hits compilation, featuring portfolio-positioning advice from eight world-class fund managers. They've been making these bets all year, but that doesn't mean it's too late to join them.

For more, see below Business Insider's best Investing stories of the week, which include a wide array of additional recommendations, strategies, and tips for navigating uncertainty.

Thanks for reading!

— Joe

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4 investing pillars from a stock-picker returning 6 times peers

Alex Umansky's Baron Global Advantage Fund has been at the top of its class for years and brought more than 60% to investors in 2020. Kiplinger rates his fund as the best global stock fund of the last year, the last three years, and the last five years for periods ending September 30.

Umansky told Business Insider about the core of his approach and how investors can keep themselves from being led off course.

Read the full story here:

Alex Umansky has been one of the world's best stock pickers for years, and his fund is making 6 times more than the competition in 2020. He told us the 4 pillars to his investing approach.

A 98th-percentile investor unfazed by the rotation into value

Cathie Wood, CEO and CIO of Ark Invest, said on a recent market update call that the recent rotation into value from growth is a sign of the bull market broadening out. Wood and her team also laid out the investment cases for two 'winner-take-most' stocks in their portfolios.

Read the full story here:

ARK CEO Cathie Wood is beating 98% of her peers this year. She and her team share the investment cases for 2 'winner-take-most' stocks in their portfolios, and explain why she is unfazed by the rotation into value.

10 investment rules from a market-beating Peter Lynch disciple

William Danoff, the portfolio manager of Fidelity's Contrafund (FCNTX), was initially rejected by Fidelity before coming aboard as an analyst in 1986. At the helm of Fidelity's Contrafund, Danoff has handily beaten the S&P 500 by over 300 basis points on average over a 30-year stretch, according to Barron's.

Danoff is a growth investor through and through, and that's coerced his portfolio's tilt into technology names. he shares 10 rules for investing that have ensured his success along the way.

Read the full story here:

Peter Lynch disciple William Danoff manages over $124 billion and has beaten the market for 30 years. He shares the 10 investment rules that ensured his success.

Stock pick central

Seeking experts who are willing to name names? Look no further:

  • Buy these 13 stocks that offer stable and predictable growth without the excessive valuations of big tech, Credit Suisse says
  • GOLDMAN SACHS: Buy these 20 deeply underpriced stocks now before the recovery helps them rebound and crush Wall Street's low expectations in 2021
  • Buy these 21 overlooked stocks set for huge gains as the world's vaccine hopes just became a reality, Jefferies says
  • CREDIT SUISSE: Buy these 8 stocks now because they're set to benefit from a powerful combination of strong returns and low expectations
  • Barclays details its ultimate strategy for picking stay-at-home market winners for a post-COVID world — and shares 2 stocks all investors should own before the recovery accelerates

Chart of the week

This chart above shows that value stocks have outperformed when vaccine expectations have improved. Goldman Sachs recommends buying so-called deep value stocks ahead of any subsequent positive developments.

Click here for more details

Quote of the week

"Many of the stocks trading with the lowest valuations today are those with business models most directly harmed by the pandemic and its impact on economic activity. The vaccine announcement by [Pfizer] provided evidence that a path to normalization exists, which should serve as a catalyst for Value stock outperformance."

— David Kostin, chief US equity strategist at Goldman Sachs

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