St. Louis Federal Reserve President James Bullard expressed optimism that the United States and China will reach a deal to end their trade war.World Economyread more
Qualcomm unlawfully suppressed competition in the market for cellphone chips and used its dominant position to impose excessive licensing fees, a U.S. judged ruled.Technologyread more
Target's e-commerce sales also surged 42%, as shoppers increasingly turned to its curbside pickup service for online orders, something Amazon can't offer.Retailread more
Lowe's shares plummeted 8% before the bell Wednesday after the company posted mixed fiscal first-quarter results and cut its forecast for the year, as higher costs weighed on...Retailread more
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Consumers in China are taking to social media to express their support for Huawei as the U.S. government looks to ramp up pressure on the Chinese smartphone maker.Technologyread more
Tensions between the two parties have heightened in recent months as the campaign for seats in the Brussels and Strasbourg-based parliament has crescendoed.Europe Politicsread more
Brazilian makeup brand Natura Cosmeticos agreed to buy Avon Products, according to two media reports early on Wednesday.Retailread more
It's not fast and may be years from visiting your neighborhood, but a walking robot is part of Ford's vision for how its autonomous vehicles deliver packages and goods in the...Technologyread more
Shares of Saudi shopping mall operator Arabian Centres were trading at 24.34 riyals ($6.49) in early deals in Riyadh.IPOsread more
There is at least one thing in common between the U.S. and Russia – their willingness to weaken the European Union, a top EU official said.Politicsread more
It turns out there is a way to succeed as a stock picker in this difficult market: Just pick the stocks the pros don't like.
Active fund managers have been getting clobbered this year, with just 16 percent outperforming basic indexes in 2016. That inability to generate alpha has played a large part in investors flocking to the exits from traditional, actively managed mutual funds and plowing money into passive exchange-traded funds, most of which track benchmarks like the S&P 500.
In all, $221.7 billion has fled actively managed funds over the past 12 months, while $174.8 billion has gone to their passive counterparts, according to Morningstar.
For those willing to keep playing in the stock-picking arena, though, there's a fairly simple and intuitive solution. The least-loved stocks by active managers have outperformed the most-loved by 13 percentage points in 2016, according to Bank of America Merrill Lynch, providing investors a reason to steer clear of the herd mentality that too often permeates investor psychology.
Pitting most-loved against least-loved has been a solid strategy for the past several years, but too often gets ignored in a momentum-driven market.
In this market, going with a least-loved strategy means selling heavily owned positions like Activision Blizzard, NetApp, Broadcom, salesforce.com and Viacom, and buying underowned companies including People's United Financial, Leggett & Platt, Alliant Energy, Brown-Forman and Apartment Investment and Management.
To be sure, stock picking continues to be a rough game.
Hedge funds saw core performance rise 6.4 percent in the third quarter, a move generated in tandem with the $2.9 trillion industry cutting its stock exposure and amping up its ETF holdings by $8.5 billion in the quarter, which BofAML said is a record pace.
Stock exposure generally is at a three-year low. Hedge funds also rotated out of financials and consumer discretionary stocks.