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Attractive Stocks In A Bifurcated Market
Wed, Oct. 22 • 2 Comments
- We see an opportunity for Main Street to beat Wall Street.
- We think domestically-oriented companies will beat ones with large foreign revenue.
- We think U.S. domestically-oriented large-caps can outperform both large peers and small-caps.
You Ain't Seen Nothin' Yet
- Today's equity market harkens back to the period 1983-1987 in the U.S. stock market.
- The largest private equity investment is in leveraged buyouts, transactions which are mostly likely to occur in small and mid-cap companies.
- When the wholesaler promoting alternatives shows up at your office, you better claim to be on vacation.
Warren Buffett On Buying Businesses
Wed, Oct. 8 • Comment!
- Buffett said loudly and clearly that he believes many people can pick out reasonable businesses to own for 10 to 20 years.
- “What’s in your portfolio” is most important question in the world of manager search and asset allocation.
- We believe that in order to hold businesses for 10 to 20 years you need them to be high quality businesses.
Buffett's Passive Can Of Worms
Wed, Sep. 24 • 10 Comments
- Buffett's mention of indexing in his annual letter invites too much speculation about his views on indexing.
- Not all fans of efficient market hypothesis believe in 100% indexing.
- Buffett and Munger affirm their belief in disciplined value investing.
The Myth Of Student Debt: Lies, Damned Lies And Statistics
- Fear has driven the story of student debt.
- Debt levels are high, but not in light of income and debt services abilities.
- The level of contentiousness in the market creates opportunity for the long-duration investor.
The Risk Of Permanent Loss
- We think investors should consider the risk of permanent loss.
- We think long-duration common stock investing is a way to defend against permanent loss.
- We think selecting high-quality companies also helps defend against permanent loss.
Could A China Recession Cause $50/Barrel Crude Oil?
Thu, Sep. 4 • 6 Comments
- China's become one of the largest oil consumers in the world.
- It takes progressively more debt to create economic growth in China and represents diminishing returns.
- China's bust and cheap oil could be great for the U.S.
The Demise Of Active Management Is Greatly Exaggerated
Tue, Aug. 26 • 7 Comments
- Too many writers are forecasting the demise of active management.
- Every fund is an index.
- Using low-turnover and long-duration can create an advantage over passive index funds.
There's No Place Like Home
- The U.S. political and economic system has been cleansed.
- Household balance sheets are better than they've been in 30 years.
- Things outside the border are scary.
Would John Templeton See Light At The End Of Aflac's Tunnel?
- Sir John Templeton said, "If you wait to see the light at the end of the tunnel, you have already missed the bottom."
- Aflac has no light in sight.
- We find Aflac has been a long-term wealth creator and remains out of favor.
U.S. Stock Market On The 'Edge Of Tomorrow'
- Markets tend to reset.
- Resetting can be difficult for the long-duration common stock investor.
- Market timing requires one to live on the "edge of tomorrow."
Your Portfolio's Enemies
- There are many enemies to a portfolio.
- Excitement, Expenses, Market Timing, Fear, and Greed can harm a portfolio.
- We will unpack these enemies.
Forget 2008 While Avoiding Popularity
- Long-duration common stock owners should be much more concerned about what they own rather than whether to own.
- Anecdotal evidence of popularity can serve as a guide for what not to own.
- Bank of America and JPMorgan are the new Philip Morris.
The Over-Capitalization Curse
- Be wary of over-capitalized areas.
- Private equity appears to be over-capitalized.
- Private equity allocations might have led to misallocation in common stock investing.
I Love Technology, But I Love LaFawnduh More
- Too many people love tech.
- Not enough people love free cash flow.
- "Competition is the enemy of competence".
The Orphaned Bull Market
- Equities appear abandoned and unloved.
- The rise of alternatives and bonds have crowded out equities.
- We think the long-duration equity holders will be rewarded.
The Investor Screwtape Letters
- Don't time the market.
- Don't be too active.
- Don't bet on every horse in the race.
Throwing Babies Out With Bathwater
- Investors are throwing the babies out with the bathwater.
- Wealth is created by the ownership of wonderful companies over a long duration.
- The will to reduce risk and volatility damages long-duration wealth creation.
Our Efficient Market Theory
- Over-thinking the market can decrease wealth.
- Fama-French's new model supports long-duration common stock investing.
- The best businesses generate a great deal of free-cash-flow and don't require much capital to perpetuate future success.
The 5 Commandments Of Warren Buffett And Charlie Munger
- Thou Shalt Not Envy.
- Thou Shall Hire Great People and Over-trust Them.
- Thou Shall View Competition as the Enemy of Competence.
Strong Insider Ownership: Do As I Do, Not As I Say
Wed, Apr. 30 • 2 Comments
- We prefer to watch what insiders do, not listen to what they say.
- Recent studies show benefits from owning firms with recent inside ownership.
- We like to be side by side with owners who have been made wealthy by their businesses and believe in the future wealth creating ability of their respective companies.
A Strong Balance Sheet
- Strong balance sheets allow great companies to seize business.
- Companies with low leverage (debt) in the S&P 500 index outperformed those with average debt levels by 1% per year.
- Long-run survival is a key element in high current intrinsic value, and strong balance sheets are a key factor in creating longevity.
Every Portfolio Has Faith
- We believe your investments reveal where you put your faith in the future.
- We assume that US large-cap stocks will offer some of the highest returns among liquid asset classes.
- To own businesses for a long time, you need a high-quality set of companies.
Amgen: Management's History Of Shareholder Friendliness
- We like companies with strong shareholder friendliness.
- Shareholder friendliness includes: dividends, buybacks, free cash flow, long-term vision, and inside ownership.
- Amgen is great of example of a shareholder friendly company.
Available At A Low Price In Relation To Intrinsic Value
- Cheap stocks outperform more expensive stocks.
- Cheapness is a gift that keeps on giving.
- Intrinsic value is a good measure of cheapness.
Hangman: The ETF Revolution
- We believe there is a false reality around ETF investing.
- Trading ETFs is like rubbing soap.
- ETFs and mutual funds have similar problems.
High And Sustainable Profitability
- We believe long histories of profitability are crucial to selecting meritorious stocks.
- Picking stocks can be like athletes finding the fountain of youth.
- High and sustainable profit margins add alpha over long-term stretches.
- Our Thoughts On Warren Buffett's Thoughts
- Harvard's Endowment: Wise Or Foolish?
- Emerging Market Misery And U.S. Large-Cap Euphoria
- Dreman And Lorde: We Will Never Be Royals
- 2014: Once More For '84