Forbes: Debt & Disaster: Puerto Rico’s Double Whammy

In Forbes, George Schultze explores Puerto Rico’s financial situation in the aftermath of the devastation caused by the most destructive hurricanes in recent memory and the federal government’s disaster response efforts. Read the full article for George’s insights into the territory’s financial health, and see why investors need to expect the unexpected.

https://www.forbes.com/sites/georgeschultze/2017/10/09/debt-disaster-puerto-ricos-double-whammy/#294ff98a5025[forbes.com]

Bankruptcy is no Plaything – Toys ‘R’ Us Files for Chapter 11

In his latest article for Forbes, George Schultze dives into the Toys ‘R’ Us bankruptcy, the third-largest retail industry bankruptcy of all time. George explains why the news wasn’t shocking to most investors, and looks into the industry and company factors that contributed to this bankruptcy. Read the full article for more!

https://www.forbes.com/sites/georgeschultze/2017/09/20/bankruptcy-is-no-plaything-toys-r-us-files-for-chapter-11/#205a9c3530f8[forbes.com]

 

Forbes: Hurricanes are Just One Kind of Disaster

Even the best business plan can fail to account for every potential negative occurrence.  A seemingly one-time natural disaster, like Harvey or Irma, makes that point all too clearly but companies can also be affected by other unforeseen disasters that have nothing to do with weather. In George Schultze’s latest piece for Forbes, he delves into why explains that companies that have relied too much on leverage and stretched their borrowing to the limit will find it difficult to get back on their feet.  

https://www.forbes.com/sites/georgeschultze/2017/09/12/hurricanes-are-just-one-kind-of-disaster/#1ffa700412e8[forbes.com

Forbes: Taking on More Risk is Always Risky Business

In George Schultze’s latest article for Forbes, he points out that many investors are using short cuts to manage their portfolios and thereby taking more risk than they may realize. George explains why this phenomenon is occurring and identifies trends that individual investors should look out for. Read the full article at the link below.

https://www.forbes.com/sites/georgeschultze/2017/08/16/taking-on-more-risk-is-always-risky-business/#5e32e67e189e[forbes.com]

Bloomberg: It Took the Market 30 Minutes to Digest Trump Jr. Email Drama[bloomberg.com]

Amid the release of emails by Donald Trump Jr., the Dow Jones Industrial Average dropped about 160 points in 20 minutes, according to Elena Popina and Oliver Renick at Bloomberg News. George Schultze also weighs in on the situation. Be sure to follow the link for the full article.

https://www.bloomberg.com/news/articles/2017-07-11/market-obsessed-with-fed-needs-30-minutes-to-digest-trump-drama

Forbes: Trump Expansion Slow To Start, But Economy Continues To Grow

In his latest article for Forbes, George Schultze discusses why, amid the Fed’s slow-but-steady tightening and the U.S. government’s slow-but-likely fiscal expansion and tax cuts, he expects the U.S. economy to keep growing. Additionally, George delves into why lower default rates do not necessarily translate into fewer distressed securities opportunities. Be sure to read the full article for more insights.

Here’s an excerpt from the full article:

“Many investors have recently questioned the relevance of active money management when lower-cost passive strategies, such as ETFs and index funds, have outperformed significantly in the last few years.  However, active investment will always be relevant because it can provide non-correlated return diversification, a benefit that can be particularly important now after so many years of good market performance. In fact, the more money that flows into passive strategies, the more likely it is that new market inefficiencies will develop that can be exploited by smart active managers. This is particularly true for distressed securities investing, a specialized discipline which simply cannot be replicated through passive management. At its heart, distressed securities investing is the ultimate value investment strategy and one of the few places left where inefficiencies, such as those created by forced sellers, misunderstood litigation, or complex restructurings, can yield event-driven profits.”

You can read the rest of the article in full at Forbes.

Forbes: GM Looks Good, but the Markets Don’t Seem to Care

Regardless of the industry or strength of a company following a reorganization, it can take the markets a considerable amount of time to warm up to a reorganized entity. With this in mind, George Schultze makes the case for General Motors, and why it remains one of the market’s fundamentally undervalued companies.

Take a look at this article excerpt:

“To further illustrate how market valuations sometimes ignore fundamentals, compare market sentiment toward Tesla versus GM. Last year GM generated a profit of $9.4 billion on $167 billion in revenues, while Tesla lost almost $675 million on $7 billion in revenues.  Similarly, GM sold 10 million vehicles in 2016 while Tesla sold only 76,000. Although Tesla is perceived as a “new economy” company that sells electric vehicles, GM is also focused on the “new economy.” In fact, GM also sells electric vehicles. Moreover, it owns a large stake in Lyft (America’s 2nd largest ride-sharing service). GM also owns Cruise Automation and even created the Maven car-sharing service. Finally, GM is leading the market in automotive connectivity and mobility with 1.3 billion OnStar customer interactions since inception. Yet, the equity market capitalization for both firms is about the same and, if you adjust for cash on the balance sheet, Tesla’s market capitalization is actually larger!”

Want to keep reading? Check out the rest of this article by the founder of Schultze Asset Management on Forbes.