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Economics & Strategy – Quantitative Research: Second

In second place for a second consecutive year is Michael Goldstein of Empirical Research Partners; he is also No. 2 in Portfolio Strategy.

Michael Goldstein
Empirical Research Partners

In second place for a second consecutive year is Michael Goldstein of Empirical Research Partners; he is also No. 2 in Portfolio Strategy. “A lot of our modeling at the stock level has to do with how you deploy capital — how that’s turning into profitability or free cash flow,” Goldstein explains. “What we’ve been looking for is conservatism. We don’t like it when managements are too bold. The market is afraid they’ll do something to undermine their own prosperity, which in some ways is the greatest it’s ever been in terms of return on equity and profit margins.” For example, five or six years ago, media companies “went from big spenders to no spenders, and basically the sector has outperformed every year thereafter because they went from believing their own story to believing nothing,” he says. “They have not reinvested for many years because they’re concerned about everything.” Companies exhibiting his preferred restraint can be found in the financial services, health care and technology sectors; those best avoided include consumer staples and utilities. Goldstein “marries quant and fundamental perspectives in a compelling way,” cheers one client.


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