How Many Zombies are in the S&P 500? A Strategy to Avoid Stocks in Secular Decline – GraniteShares – 4.28.22

Overview:
Title: How Many Zombies are in the S&P 500? A Strategy to Avoid Stocks in Secular Decline
Date: Thursday, April 28, 2022
Time: 1:00 PM Eastern Daylight Time
Duration: 1 hour

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Summary:

Now On Demand.

Pick Winners or Exclude Losers?

Finding winners is hard. What if it is easier to simply XOUT the losers? A new paradigm for excluding potential laggards in an age of technological disruption.

As opposed to identifying winners, the XOUT approach is simple – look to cut out the losers and you’re left with a portfolio that may be better positioned to outpace the broader market. Whereas even the most talented managers have struggled to select winners, even an unskilled manager may be able to identify multiple losers, especially those with business fundamentally challenged by technology.

The rise of passive indexing has been a textbook example of a disrupter successfully challenging an industry incumbent, namely active stock picking, that failed to effectively innovate. Despite passive’s momentous growth, the strategy is not perfect. Potentially, the greatest flaw of index investing is that the strategy buys indistinctively every stock in the market, even those in long-term secular decline.

This presentation will cover:

  • The XOUT Investment Philosophy
  • Rationale for avoiding losers
  • Analysis of top 10 “danger stocks” or XOUTs
  • Performance attribution

Speakers:
SpeakerName William Rhind Founder and Chief Executive Officer GraniteShares ETFs

GraniteShares is an award-winning investment firm dedicated to creating and managing Exchange Traded Funds (ETFs). Through a focus on real assets, income and disruptive core equities, the firm provides investors with innovative, cutting-edge investment solutions. Graniteshares believes the future of investing lies at the nexus of alternative thinking, low fees, and disruptive product structures—the core of its beyond beta philosophy. Backed by Bain Capital Ventures, the firm launched its first product in 2017 and is now among the fastest growing ETF issuers in the world with over $1.6 Billion in assets under management spanning a full array of investment strategies. Will has built and managed businesses in the ETF market for almost his entire career and held positions at firms such as iShares, World Gold Council & ETF Securities. Will is regularly featured in media outlets such as Fox, CNBC, Bloomberg, WSJ, Barrons.
SpeakerName David Barse Founder and Chief Executive Officer XOUT Capital

David Barse is the Founder and Chief Executive Officer of XOUT Capital® and Founder of DMB Holdings, a private family office.

He was formerly the CEO of Third Avenue Management for 25 years, a pioneer in fundamental, bottom-up deep value investing. Barse also sits on the Board of Trustees of Brooklyn Law School, serves as a member on the EQM US LARGE CAP Index Committee, Chairman of the City Parks Foundation board and a board member of the Big Apple Gold Chapter of the Young Presidents Organization. Lastly, he is an Executive Producer of the Academy Award and Grammy winning best documentary film ‘Summer of Soul.’

Barse earned his J.D. at Brooklyn Law School and holds a bachelor’s degree from George Washington University.