We don’t usually discuss technical analysis. We are fundamental analysts with a long time horizon. We practice Value investing, looking for companies whose shares are trading cheap relative to earnings and assets. Technical analysts argue that everything that you need to know about future stock prices is embedded in past prices and volume. But two […]
News & Insights
Update on the Korean Peninsula…
A lot has been happening on the Korean Peninsula, both North and South. In our March newsletter we covered the impeachment of South Korea’s former president Park Geun-hye and public fury over political corruption. Since then, former President Park has been arrested; the first liberal South Korean president in a decade, Moon Jae-in, has been […]
What We Do When We Don’t Know…
Humans have evolved to be great at many things. We are uniquely able, for example, to master complicated speech patterns and engage in complex reasoning. But the big brains that make these things possible can also get us into trouble. In situations where there is a lot at stake and where the outcomes are uncertain, […]
The 2-Minute Thought: The Best Way for Individual Investors to Compete
Individual investors often forget that active investment is a competition. It is you against the person on the other side of the trade. If you are buying, you should always be thinking about what the seller knows that you don’t. Michael Mauboussin and his colleagues Dan Callahan and Darius Majd at Credit Suisse wrote as […]
The 2-Minute Thought The Distance Between North and South Koreans
Every five years, the East Asia Institute surveys South Koreans on whether they view North Korea as “one of us,” “a brother,” “a neighbor,” “an enemy” or “other.” In 2005, 51% of South Koreans said they saw North Korea as “a brother” while only 15% selected “enemy.” But by 2015, 41% of South Koreans said […]
The 2-Minute Thought: Learning to Listen Better
People are terrible listeners. An oft-cited statistic is that we spend 60% of conversation time listening to others but can only remember 25% of what is said. In an article on what they call the “Plateau Effect,” Bob Sullivan and Hugh Thompson wrote that half the adults asked to sit through a 10-minute oral presentation […]
We Are All Optimists on This Bus…
As you can see from the chart below Wall Street is a pretty optimistic place. The lines show what analysts were estimating for corporate profits at the beginning of each year versus how they turned out. Over thirty years of tracking these numbers only twice have the S&P 500 companies delivered earnings higher than first […]
The State of Your Wallet…
There are some truisms in America we hold dear. One is we see ourselves as a land of opportunity where if you work hard enough you can be a success. A second is that each generation will do better than the last. If you were born in 1940 there was about a 90% chance that […]
Is There Free Money in Closed-End Funds?…
One of the great unanswered questions in the field of investments is why closed-end mutual funds can trade at a persistent discount to their net asset value. This is the famous “closed-end fund puzzle” — what Burton Malkiel of Random Walk fame once called “one of the most enduring conundrums in the field of finance.” […]
It’s a Different Ballgame Now…
On March 15th, the Federal Reserve raised its benchmark overnight lending rate a quarter point to a range of 0.75%-1.0%. The increase, together with a 0.25% bump last December, represents quite a shift. With a few brief exceptions, interest rates have been on a downward path since 1980. Markets have taken the Fed’s latest effort […]
The 2-Minute Thought: Where Do Great Investment Ideas Come From?
When experienced investors are asked where they get their ideas, they often say voracious reading or careful screening of companies for characteristics they like – or both. But there is wide variety in what they read – and widely divergent attitudes toward screening. Other sources of ideas include company visits, building expertise in obscure fields […]
The 2-Minute Thought: Does the Dwindling Number of U.S Stocks Matter?
In a recent paper called “The Incredible Shrinking Universe of Stocks,” Michael Mauboussin, Dan Callahan, and Darius Majd at Credit Suisse delve into why there has been such a sharp drop in the number of publicly traded stocks in the U.S. This is a U.S. phenomenon. In developed markets outside the U.S., the number of […]
