Between 1976 and 2017, Warren Buffett’s Berkshire Hathaway delivered an average annual return of 18.6% over Treasury bill rates — easily beating the stock market’s excess return of 7.5%. That is not just a good run for a few years or a decade. It’s an extraordinary record spanning four decades. On a risk-adjusted basis, Berkshire […]
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What to Watch…
Watching TV used to be a relatively straightforward affair. The U.S. had three dominant broadcast networks that offered up a set list of programs. True, your viewing choices were limited and there was a lot of advertising but ah…life was simple! Cable TV, first introduced in the 1970s, disrupted this lucrative business model. By the […]
Are My Glasses Too Rose Colored?…
It’s January and time for the traditional start-of-the-year predictions. Well, not this time. We have learned painfully over the years how confusing this world is and how predictions are often more about hope than reality. So this time we are going to look backwards and, surprisingly, learn some really important things. Nicholas Kristof in his […]
An Old School Financial Analyst Rant…
A company can basically do three things with its net after tax income. It can pay dividends. It can reinvest back in the business through plant and equipment spending, research and development expenditures, and the acquisition of other companies. Lastly, it can buy back its shares. Pretty simple. Spoiler alert, we are not big fans […]
Even the Best Make Mistakes…
Benjamin Graham, the father of modern stock analysis, was so brilliant that in his last semester at Columbia University, he received job offers from three of the university’s departments – English, Mathematics, and Philosophy. Instead of choosing any of these, however, he went to Wall Street in 1914 and achieved extraordinary results. Over the course […]
Fighting the Last Battle…
There are some pretty big problems in the world today. But just as we tend to ignore the positive (see Eric’s first page article), we also tend to miss the fact that slowly and without much fanfare things can change. While none of the problems outlined below are fully solved, they are seeing improvement. Illegal […]
The 2-Minute Thought: The Last Edition . . . And A Few More Thoughts
This is the last edition of The 2-Minute Thought. It’s time – and taking a break from the same format week in and week out often is a good idea. But first, a few random thoughts before going: Anders Hall, the head of Vanderbilt University’s investment office, said in a recent interview with SumZero that […]
Our Chocolate Recipe Pivots to the East…
Hooray – our annual Chocolate Dessert for this Holiday Season. And just to impress you with our effort, listen to this vetting process. Jordan Lafayette here at the office supervised a rigorous Test Kitchen to get to our final result. From early November two employees a week prepared a chocolate recipe. In early December we […]
Competition and Innovation in the Middle Kingdom…
Twenty years ago China was already an export juggernaut but it was difficult to see it becoming a consumer powerhouse. It did not have credit cards, banks were backward in their technology, there was no credit rating system, and above all there was no delivery system for internet shopping – no UPS or FedEx. Well […]
A Beautiful Mind…
You’ve all heard of the placebo effect, where a patient is administered a fake medicine without knowing and then shows signs of recovery. That’s interesting on its own, but would you believe that they are now running tests where patients are told that the pill they are taking is fake and the results still show […]
Is the Whole Greater Than the Sum of the Parts?…
As value investors, we spend our time trying to identify firms whose shares are mispriced by the market. This work often leads us to examine companies that are responding to a range of challenges such as rapid technological change or intensifying competition. Under these circumstances, managers often turn to acquisitions as the best path forward. […]
Shifting Back To The East …
That chart at the bottom is from a recent Economist article. It’s interesting how economic power has shifted first from East to West and now back to the East. In the early centuries China and India were the largest economies, then Europe became preeminent. America’s turn came in the 1900s and with the exception of […]
