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The 2014 All-America Research Team: Portfolio Strategy, No. 2: Michael Goldstein

< The 2014 All-America Research TeamMichael GoldsteinEmpirical Research PartnersFirst-place appearances: 3

Total appearances: 20

Team debut: 1993

In second place on this roster for a third year running and claiming the No. 2 position in Quantitative Research for a fourth consecutive year is Michael Goldstein of Empirical Research Partners. “He’s amazingly smart,” one admirer declares. “He’s the one person I always want to listen to. He’s very understanding of what the market is doing — no matter what the topic, he can broaden and deepen your understanding.” Goldstein has been advising clients that one critical issue for U.S. companies, especially those in manufacturing industries, is their ability to sustain margins, given the fact that “cash-flow generation is at historically high levels,” he says. His contrarian view is that margins will stay higher and for longer than most market participants project, thanks in large part to the salutary forces of globalization and robotics. “Automation on the plant floor,” he explains, “has allowed U.S. manufacturers to significantly reduce labor as an input cost.” Accordingly, he favors the autos, auto parts and capital goods sectors. But the strategist is less sanguine on dividend-yielding stocks such as utilities, which a crush of investors has chased in a flight to safety in the wake of the financial crisis. Goldstein deems those shares “not safe” and “unsustainable in the long-run, having been swept up in the appetite for yield above and beyond what’s justified by their fundamentals.”

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