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Stupidity Is Not Cyclical

Updated: May 7, 2019

March 6, 2019 - Keith Rosenbloom, Cruiser Capital Advisors managing partner, discusses market tailwinds, U.S. trade negotiations with China and investment opportunities with Jackie DeAngelis of Yahoo Finance.

"We have a saying in our place, which is that stupidity is not cyclical," said Keith Rosenbloom, Managing Member of Cruiser Capital, a New York based hedge fund.

Essentially, stocks can be traded at multiples that are either too low or too high compared to their fundamental value at any time, regardless of where the economy is in its cycle. In the current environment, many stocks have traded down in the past few months, as investors dumped their holdings to end 2018, as multiple potential macroeconomic headwinds have taken hold.

"This whole market dislocation has caused a lot of very fundamentally sound businesses to now trade at multiples they haven't traded at in a very long time, so from our perspective we think it's pretty exciting," Rosenbloom added. Of course, the market has rebounded some in January, but earnings multiples are still much lower than they were pre fourth quarter selloff.

Rosenbloom noted that the majority of floor trading now is driven by algorithms, which largely do not flash buy or sell signals based on fundamentals, but rather 'headline risk' and other factors. 



All information provided herein is for informational purposes only and should not be deemed as a recommendation to buy or sell securities. Cruiser Capital and its affiliated parties may hold a position in the securities mentioned at the time of posting, and may trade in and out of these positions in the future without further notice. All performance results are estimates and should not be regarded as final. Past performance is not necessarily indicative of future results. All investments involve risk including the loss of principal. This article may not be redistributed without the express written consent of Cruiser Capital Advisors LLC and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product.


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