Commentary

Mr. T and Today’s Investment World

It would be correct to say that a number of us have had a little more “alone” time on our hands over the last 6 months and it is also correct to note that the online world provides many chances to waste said time. Which brings me to Mr. T of A-Team fame, who for completely nostalgic and personal family reasons, comes to the fore at particular times with his “I Pity the Fool” meme.

Commentary

2020 Is Cancelled

  • How this environment stacks up in a 36-year value investing career
  • 5 things we think are important for our investors
  • What we are actually doing in our portfolios right now
Commentary

Here is a Strategy: Buy as Much ViaSat as You Can Stomach

We spend a lot of time in these pages endeavoring to wax poetically about the world at large and our investment place within it, even though that is not really what we do for a living. We get it. Some people just want to know our thoughts about the investment world…and yes, we do have opinions on that subject.

Commentary

Repetition Can Be a Form of Change

Despite Sauron and Einstein’s failed attempts at unified theory, 2019 was simply the tenth year whereby interest rates were low and went lower, credit remained both cheap and plentiful, the economy was “good enough,” and those who can print money re-dedicated themselves to a willingness to print money. The logical conclusion to this set of events is to buy and hold U.S. equities. Drop the mic—again.

Commentary

Tales From the Proxy…Cont’d.

"I am more worried about this election trend than Russian issues. "

Commentary

The Great Complacency...Continued

At this point last year, we were effusively cautious after a period of terrific performance. We suggested that while we considered a material number of portfolio stocks to represent "solid" values, their near-term appreciation was going to be limited after the big numbers of 2013.
Commentary

Metastability?

We remain cheerfully bearish on fixed income and slightly less so on equity markets. The combination of volatility and confusion produces opportunities and since we have had a lot less of the former, we have seen a lot fewer of the latter. Not much of this has changed this year...but things do change-sometimes for reasons we can "see" and sometimes due to factors we can't. We remain utterly convinced that Federal Reserve policy is our greatest known unknown and we remain extraordinarily skeptical that the Great Monetary Experiment will end with a purely beneficial outcome. This quart
Commentary

Steve Jobs Didn't Give a *[email protected]% About the Debt Ceiling

A quick nod to Bloomberg columnist Caroline Baum from whom we lifted our title. Anything else you might have been (or will be) subjected to on the subject of how the government operates pales in materiality to the headline. And as miserable as our predicament seems to anyone over the age of 13, it really and truly is old and increasingly dull news. To wit, I present the following, highly curated list of quotes-please note the timeline.
Commentary

Who Are You Going to Believe-These Non-GAAP Numbers or Your Lying Eyes?

Great performance in the short-run-either absolute or relative-is a mixed blessing. If an investor owns a portfolio of stocks that is embedding 30% undervaluation, and voila, finds himself up 30% (this is a hypothetical number for the purposes of this example but its not far from recent reality) in six months, without a concurrent upward improvement in underlying fundamentals, you have to be a regular on CNBC to expect another 30% return over the next six months.
Commentary

Harleys and Leather Jackets

We are just about done with Proxy Season and with summer in full swing, there is nothing more that we would like to do than kick back and indulge in the 75 pages of shame, greed, ignorance, and political correctness-with only the occasional bright light of shareholder friendly corporate governance-that make up SEC Form 14A, aka the Proxy Statement. I would postulate that this document remains an underrated and under-read part of the investment puzzle as it is the factual record of managements incentives.
Commentary

Call Him Ishmael

One of the hardest things to conquer as a value investor is the concept of "price." The industry remains mired in fascination with abstract prices like 100, 1,000, 14,000, previous highs, new lows, etc. The stock is up x% from x dollar price; it is down x% from x price. There is also much in print and general fretting in regard to "price action," with lots of attention paid to where the stock has "been" and how this move relates to other "moves," as in "the largest move since last December 12th."
Commentary

The Lost Decade...Found?

While much of the fundamental picture has played out as we expected over the past 18-24 months, the financial markets appear to be concerned solely with the existence or non-existence of macro headlines and events. There seems to be a disconnect between market movements and fundamentals which means doing real work based on intellectual honesty and logic puts you at a disadvantage. Chasing momentum and profiting from central bank market manipulation appear to be the current winning strategies.
Commentary

Idiosyncratic Risk...and the Other Kind

If the recent election demonstrated anything of relevance to an investor, it should have been the beginning of the end of the tyranny of the "catalyst." The day before the election, an investor could have legitimately been worried about any number of micro, macro, domestic or global issues. And yet the sun rose, work was attended to by those who have jobs, markets opened, fell, and closed and the collective attention moved to the next "perceived" catalyst-the so-called fiscal cliff. Calling Roseanne Roseannadanna.
Commentary

Volcker Does Not Rule

There are many reasons an interested observer can conjure as to why the US economy remains in a petulant quagmire, and some of them are actually not political in nature. Our mini-treatise today is on our particular favorite: the inanity of financial services regulation and the whipping boy of the month, Jamie Dimon of JP Morgan.
Commentary

The Active Management Pretend Game

Let us start by saying that this is not an essay on whether or not a large pool of institutional asset allocators should consider an indexing strategy or not. What follows is an analysis of the question: If you are going to charge active management fees with the goal of outperforming relevant benchmarks over the longer run within reasonable risk parameters, what sort of preconditions are suggestive of a higher probability of success?