Author Archives: Edward A. Studzinski

About Edward A. Studzinski

Ed Studzinski has more than 30 years of institutional investment experience. He was a partner at Harris Associates in Chicago, Illinois. Harris is known for its value-oriented, bottom-up investment approach that frames the investment process as owning a piece of the business relative to the business value of the whole, ideally forever. At Harris, Ed was co-manager of the Oakmark Equity & Income Fund (OAKBX). During the nearly twelve years that he was in that role, the fund in 2006 won the Lipper Award in the balanced category for "Best Fund Over Five Years." Additionally, in 2011 the fund won the Lipper Award in the mixed-asset allocation moderate funds category as "Best Fund Over Ten Years. Concurrently Ed was also an equity research analyst, providing many of the ideas that contributed to the fund’s success. He has specialist knowledge in the defense, property-casualty insurance, and real estate industries, having followed and owned companies as diverse as Catellus Development, General Dynamics, Legacy Hotels, L-3, PartnerRe, Progressive Insurance, Renaissance Reinsurance, Rockwell Collins, SAFECO, St. Joe Corporation, Teledyne, and Textron. Before joining Harris Associates, over a period of more than 10 years, Ed was the Chief Investment Officer at the Mercantile National Bank of Indiana, and also served on their Executive and Asset-Liability Committees. Prior to Mercantile, Ed practiced law. A native of Peabody, Massachusetts, he received his A.B. in history (magna cum laude) from Boston College, where he was a Scholar of the College. He has a J.D. from Duke University and an M.B.A. in marketing and finance, as well as a Professional Accounting Program Certificate, from Northwestern University. Ed has earned the Chartered Financial Analyst credential. Ed belongs to the Investment Analyst Societies of Boston, Chicago, and New York City. He is admitted to the Bar in the District of Columbia, Illinois, and North Carolina.

Summer Solstice

By Edward A. Studzinski

“The predicament
You find yourself in,
Is not as dire,
As you imagine
The door you
Think is closed,
Is an illusion,
Self-imposed …”

By J.P. Niemeyer, 5/21/2021

One of the things I would suggest to people is that they broaden their horizons with regards to the things they read about Continue reading →

Currency Games

By Edward A. Studzinski

“Look straight ahead. What’s there?
If you see it as it is
You will never err.”
Bassui Tokusho

I’m probably not the person to weigh in on the issue of whether the indications of inflation that are surfacing in the economy are anything more than temporary as we are being told by the Chairman of the Federal Reserve Board. That said, at least in terms of energy and food, something more than anticipated seems to be happening. When the cost of gasoline Continue reading →

Chaff from Wheat

By Edward A. Studzinski

“The idea that a nation can tax itself into prosperity is one of the cruelest delusions which has ever befuddled the human mind.”  Winston S. Churchill, speech at the Royal Albert Hall, 21 April 1948

Yesterday I thought this would be a relatively easy piece to write. The Vanguard S&P 500 fund, according to Morningstar, closed out on April 30th with a year-to-date total return of Continue reading →

Scale Matters

By Edward A. Studzinski

“Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.” Margaret Thatcher, interviewed on This Week, 5 February 1976

Another month of equities hitting new highs across the indices. In many instances, active equity managers, especially value managers, are again outperforming passive strategies. Sadly, the same has not been Continue reading →

Do As I Say …….

By Edward A. Studzinski

“Snow on the pines
thus breaks the power
that splits mountains.”

Otaka Gengo Tadao (大高源五忠雄,one of the forty-seven Ronin).

Last month, David Snowball opined on Morningstar’s John Rekenthaler’s requiem for mutual funds. And while David agreed with Rekenthaler that the end of the fund industry was not imminent, both feel that it is inevitable. I have felt that to be the case for some time. Rather than be the Cassandra Continue reading →

Which Way to Sherwood Forest?

By Edward A. Studzinski

Amateurs talk about strategy and tactics. Professionals talk about logistics and sustainability.

Robert Hilliard Barrow (1922-2008), a former United States Marine Corps commandant and general, interview published in the San Diego Union on November 11, 1979.

A year that started out gangbusters in terms of market appreciation, without regards to valuations, has subsequently started having hiccups on and off. That begs the question as to whether it is now recognized that valuations are stretched? Or perhaps it is a recognition that no matter how many stimulus packages are passed by Congress, flooding the market with money and Continue reading →

Another Year of Living Dangerously

By Edward A. Studzinski

“Finance is the art of passing currency from hand to hand until it finally disappears.”

Robert Sarnoff (1918-1997), creator of the RCA conglomerate

So, to paraphrase Churchill, are we actually at the end of the beginning, at least as it pertains to the war against the coronavirus? Well, maybe. In this country, there are two vaccines approved, and globally we are looking at Continue reading →

Holiday Reading List

By Edward A. Studzinski

“Imagine the Creator as a low comedian, and at once the world becomes explicable.”

        H.L. Mencken

We have come into December with November having been one of the best performing stock market months ever. S&P 500 Index products have generated a total return of approximately 14%. Active-managed funds have had returns all over the lot, with value-oriented funds having crept into the positive return range, generally single digit, as a result of strong monthly performance. Growth funds, depending on Continue reading →

The End of Many Eras

By Edward A. Studzinski

“A genius is the man who can do the average thing when everyone else around him is losing his mind.”

            Napoleon Bonaparte

For those who missed my comments last month, there were not any. I felt I had nothing new to say. And while the same may be true this month, I thought I would give it a shot.

The other day I was joking with Continue reading →

Feet of Clay

By Edward A. Studzinski

“Advertising is the rattling of a stick inside a swill bucket.”

                    George Orwell, ch. 3, Keep the Aspidistra Flying (1936)

I recently had occasion to speak with a long-term value manager who was lamenting how badly value was out of favor and how much it was hurting his and his firm’s performance and investor returns. The genesis of that sub-par performance, which one finds repeated across many value-oriented firms, is a departure from being attuned to the intrinsic business value of the firms invested in, replaced by a laser-like focus by his firm’s analysts and portfolio managers on what stocks are going up because the market Continue reading →

“He said what?”

By Edward A. Studzinski

“Why shouldn’t things be largely absurd, futile, and transitory? They are so, and we are so, and they and we go very well together.”

George Santayana, in a letter to Logan Pearsall Smith (24 May 1918) in The Works of George Santayana: The letters of George Santayana 1910 – 1920 (2002), p. 319

Another month of strong market performance. Another disconnect to what is going on in the domestic Continue reading →

Rebound, What Rebound?

By Edward A. Studzinski

“Historian: an unsuccessful novelist.” 

H.L. Mencken, A Mencken Chrestomathy (1949)

The S&P 500 just had the best quarter in terms of returns in more than twenty years.

But is it real? Although consumer sentiment is up, unemployment is at levels not seen since the Great Depression. Depending on whether another stimulus/support bill can make it through Congress, many Americans face a cash crunch by Continue reading →

What We Do Not Know!

By Edward A. Studzinski

“Pessimist: one who, when he has the choice of two evils, chooses both.”

                    Oscar Wilde

One wonders what fifty years down the road, people will say about this period and how we as a nation dealt with the challenges with which we were presented.

In this country, we have had the conflict between states that never really closed but recommended social distancing and states that fully locked down and shut-in their residents and shut down their economies. In the latter case, the initial goal was Continue reading →

The Sparrow’s Revenge

By Edward A. Studzinski

“The only way to success in American public life lies in flattering and kowtowing to the mob.” H.L. Mencken, “On Being an American” (1922)

Plague Investing

A question with which I am regularly peppered (and which I usually decline to answer) is how one should invest during this rather chaotic time. The short answer – circumstances continue to evolve so much, both from a public Continue reading →

Quo Vadis, America?

By Edward A. Studzinski

“Look straight ahead. What’s there?

If you see it as it is

you will never err.”

Bassui Tokusho, Japanese Zen Buddhist monk

Today we have little if any clarity as to where we are going with regards to the markets and the economy. We simply do not know, never having been here before. Much depends on when the numbers of people testing positive for COVID-19 peak and begin to trend downwards, as they seem to be doing now in Italy and South Korea. These are countries where one can Continue reading →

Black Swans and Locusts

By Edward A. Studzinski

The typical American of today has lost all the love of liberty that his forefathers had, and all their disgust of emotion, and pride in self-reliance. He is led no longer by Davy Crocketts; he is led by cheer  leaders, press agents, word-mongers, uplifters.

H.L. Mencken, “On Being an American” (1922)

On balance, it is somewhat hard to believe that in a few short weeks, we have gone from the domestic markets hitting new record highs, albeit with a continuing narrowing of breadth, to what is a full blown correction, with the markets now off by more than ten percent. And as we look to Monday, the first trading day in March, the question is have we reached a floor, or is this going to continue on for some time, wiping out performance gains for all of this year and go on to erase all or a substantial part of 2019’s profits.

What triggered the sell off this past Monday, which was a global event? More than likely, it was Continue reading →

The Quality of Research

By Edward A. Studzinski

“Until life goes out

Memory will not vanish

But grow stronger

Day by day.”

   -Anonymous

Right after the end of the year, I was speaking with a friend who is a senior portfolio manager at a private, employee-owned, independent investment firm in New York, with approximately $450B in assets under management. As such they are not beholden to Continue reading →

Rearranging the Deck Chairs

By Edward A. Studzinski

Democracy is grounded upon so childish a complex of fallacies that they must be protected by a rigid system of taboos, else even half-wits would argue it to pieces. Its first concern must thus be to penalize the free play of ideas. In the United States, this is not only its first concern, but also its last concern.

Henry Louis Mencken, In Defense of Women (1918)

We are at that time of year when people should be Continue reading →

Liquidity, Always Liquidity

By Edward A. Studzinski

“The only way a man can remain consistent amid changing circumstances is to change with them while preserving the same dominating purpose.” Winston S. Churchill, “Consistency in Politics,” Nash’s Pall Mall, July 1927, reprinted in Churchill’s Thoughts and Adventures (1932)

Where’s the Risk?

Horizon Kinetics, in its Q3 Commentary, again did a superb job of raising issues that investors should be Continue reading →