Up to now, Saudi Arabia has survived on oil. Half its GDP and 80% of its exports are from hydrocarbons. But Saudi Arabia is no Norway. Rather than build for the future, it has used oil wealth to fund cushy public sector jobs and generous cradle-to-grave welfare. That’s resulted in a frail private sector that […]
News & Insights
Companies That Earn Their Keep
As Value investors, we spend our time looking for good companies that sell at a discount to their fair market value. Defining a “good” company is the first step in this process. Factors such as a strong market position and capable management are hallmarks of a quality company but can be subjective and hard to […]
The 2-Minute Thought: Richard Yamarone Says These Five Indicators Point To Recession
Bloomberg economist Rich Yamarone says that a U.S. recession is coming. He won’t say when or how — just that too many things don’t look right. Speaking to the San Francisco Chartered Financial Analyst (CFA) Society yesterday, Yamarone said we are in “Bizarro World.” That is a world where 13 countries have negative yields on […]
The 2-Minute Thought: The Golden Era of Investment Returns Is Over
Investors should set their sights lower, according to a recent study by McKinsey Global Institute called “Diminishing Returns.” The report says that 1985-2014 was a golden era for investment returns that is unlikely to be repeated and that investors will need to get used to a world of lower returns. That’s because the confluence of […]
The 2-Minute Thought: To Invest in Tobacco and “Sin Stocks” – Or Not?
Last week, the California Public Employees’ Retirement System, or “Calpers,” said it is considering investing in tobacco stocks again. If it decides to do so, it will be a noteworthy reversal. As the U.S.’ largest pension fund, Calpers’ actions carry weight. Calpers divested from tobacco in 2000, but not for the social responsibility reasons some […]
The 2-Minute Thought: The Stories We Tell About Manufacturing
There are all kinds of narratives about manufacturing. The old narrative from pre-financial crisis days was that globalization was taking manufacturing away from developed economies and giving it to emerging markets that had cheap labor. The 2000s were all about the hollowing out of textile mills in the U.S. while China became manufacturer to the […]
The 2-Minute Thought: Stocks We Chose Not To Buy
We choose not to buy many of the stocks we look at. In fact, we pass on most. Nevertheless, we learn a lot from looking at all of them – and then looking back at them again after we’ve said “no.” As value investors, we look for stocks selling for less than we think they’re […]
Everything Should Be as Simple as it Can Be, But No Simpler… (Attributed to Albert Einstein)
Pundits in January feared that the global economy had reached “stall speed.” Central Banks had done as much as they could to prop things up. At some point the world might turn in on itself for a major Recession. Things look a lot brighter today. But what about the long term outlook for the U.S.? […]
Make America Great Again?
What’s all this about “again”? We certainly have our problems but the U.S. is still an incredible engine. As the old saying goes, “In the land of the blind the one-eyed man is king.” We are qualified to be the one-eyed man today, having recovered more impressively than almost any other country from the Great […]
What Does It Take To Get Ahead?
Meet YY Lam, rock star (pictured). Okay, he’s not really a rock star, but he kind of looks like one. He’s got the hair, the $190,000 sports car and lots of adoring fans. What Mr. Yat-yan Lam really does is teach Chinese language at one of Hong Kong’s biggest private after-school tutoring institutes called Beacon. […]
“Nothing Fixes Low Prices Like Low Prices…”
I just returned from the annual OGIS conference in New York where a wide range of U.S. based oil and gas companies presented to the investing public. The event is always an excellent way to gauge the health of the industry and this year proved no exception. A year ago, the upbeat presentations featured colorful […]
The 2-Minute Thought: The Year You Were Born Matters to Your Wealth
Source: Ray Boshara, Federal Reserve Bank of St. Louis, “The Future of Building Wealth: Can Financial Capability Overcome Demographic Destiny?” When it comes to building wealth, personal ability matters — but so does luck. That’s something Warren Buffett always has acknowledged in his quips about winning “the ovarian lottery” — his way of saying he […]
