Category Archives: Edward

Asymmetric Investing

By Edward A. Studzinski

“If more than ten percent of the population likes a painting it should be burned, for it must be bad.” George Bernard Shaw

Where are we with one third of the year gone? Many domestic and international funds are showing year-to-date positive total return performance ranging from the low teens to just into the twenty percent range. The more instructive number is the total return performance looking back over one year. There many funds are still showing negative numbers, not having Continue reading →

Brand or Generic?

By Edward A. Studzinski

The Romans had a maxim, “Shorten your weapons and lengthen your frontiers.” But our maxim seems to be, “Diminish your weapons and increase your obligations.” Aye, and diminish the weapons of your friends.

Winston S. Churchill, speech to the House of Commons, 14 March 1934

There has been a lot of discussion in recent months about the Kraft Heinz Continue reading →

Ketchup is Ketchup, Mustard is Mustard

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)

As we move forward, now more than half-way through the first Continue reading →

Problems, What Problems?

By Edward A. Studzinski

“Life is a predicament which precedes death.”

  Henry James

After a year in which most investors saw unrealized losses in their fund investments due to a very volatile December, probably half of those unrealized losses have been made up through the end of January 2019. This reinforces again the value of being a long-term investor, when you are comfortable with the investment philosophy, strategy, and personnel implementing same at a fund.

But do you Continue reading →

The Year That Wasn’t!

By Edward A. Studzinski

“Human life is punishment.” Seneca

“Vīta hūmāna est supplicium,” Lucius Annaeus Seneca

Looking at the detritus of the year just passed and its effect on investment portfolios, the question that will be asked ad nauseam over the next four or five weeks will be some variant on “How did this happen?” The answer is rather short and simple. You, your mutual fund portfolio manager, and the asset management firm that the fund is part of, all were too greedy.

How so? Continue reading →

Coal in Your Stocking

By Edward A. Studzinski

Snow on the pines

Thus breaks the power

That splits mountains.

Otaka Gengo Tadeo (one of the forty-seven samurai).

Year-end Musings

So, another month of volatility come and gone. I think back to about this time almost a year ago, when one of my dinner companions at an event in New York was Byron Wien. Byron had just released his famous annual predictions, one of which was that Continue reading →

The Market at Ebb Tide

By Edward A. Studzinski

“In three words I can tell you everything I have learned about life. It goes on.”

                          Robert Frost

Golden Stacks Again

One of the more entertaining stories of September, reflecting just how far we have fallen, was to be found in the Business Section of the New York Times on Continue reading →

Consequences – Unintended or Not?

By Edward A. Studzinski

“The danger is not that a particular class is unfit to govern.  Every class is unfit to govern.”

          John Emerich Edward Dalberg Acton, aka Lord Acton, “Letter to Mary Gladstone” (24 April 1881)

The continued shrinking of liquidity has been a continued concern of mine.  We are at a point where the danger signals are again blinking, except the danger will come not from the direction Continue reading →

Antitrust Law, What Antitrust Law?

By Edward A. Studzinski

“A smooth sea never made a skilled sailor.”

English proverb sometimes attributed to FDR

There is a tendency among investors, especially younger ones, to extrapolate their assumptions about investments far off into the future, beyond just a normal year or two. Once something has started working – growth rates, earnings increases, share price growth – expectations become unrealistic AND unsustainable. We have seen that in the last few years about the Continue reading →

Dotcom 2018 – This Time It’s Different?

By Edward A. Studzinski

“If you attack stupidity you attack an entrenched interest with friends in government and every walk of public life, and you will make small progress against it.”

     Samuel Marchbanks

Those of us who were value investors and running money back at the beginning of 2000, remember what a horrible time it was. For some years value had been lagging growth in performance. We were routinely told, either in emails or other communications from our investors, that our style of investing was never coming back, that we were dinosaurs who hadn’t recognized that we were extinct, and that technology stocks were the place to be as they represented the Continue reading →

Not in Kansas Anymore!

By Edward A. Studzinski

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the things you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover.”    Mark Twain

With June, we have had the coming of another Morningstar Conference. Repeatedly I studied the agenda. I could not see anything I thought worth hearing. Rather than presenting many of the leading investment professionals of the mutual fund world, this year the key seemed to be Continue reading →

Active Value versus Indexation – Godzilla versus the Smog Monster

By Edward A. Studzinski

The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently.

 Nietzsche

Some years back my colleague Clyde McGregor and I used to have philosophical discussions about the market positioning of our fund, the Oakmark Equity and Income Fund (OAKBX), vis-à-vis our competitors. And while some of our focus was on fees, most of the Continue reading →

Rolling Down the Appian Way

By Edward A. Studzinski

“To succeed in the world, it is not enough to be stupid, you must also be well-mannered.”

Voltaire

There is a show on Showtime cable that purports to give a pretty good reading of the world of hedge funds and their masters, called “Billions.” It is now into its third season. A scene in the third episode of this season resonated with me regarding some of the issues and problems that active managers face today. The main character, Bobby Axelrod of Axe Capital, has surrendered his rights to trade as a hedge fund manager/chief investment officer in return for having his personal capital unfrozen and thus accessible. His successor as Chief Investment Officer at the firm, Taylor Mason, has begun a search to find some quantitative managers that can be brought into the firm, hoping they will be additive to the Continue reading →

Popping the Balloon

By Edward A. Studzinski

“We live in an age of great events and little men.”

       Winston S. Churchill

We have made it through another month, and another quarter. It was not quite so painless for either investors or money managers, as year to date the S&P 500 has now dropped into negative territory. Volatility is clearly back. And while active managers made a valiant effort during the last week of the quarter to move the averages back up into positive territory, it was not to be.

What comes next? Stocks are Continue reading →

It Was the Best of Times ……

By Edward A. Studzinski

“I have to change to stay the same.”

Willem de Kooning

Horses for Courses

One of the columnists I have a great deal of time for is John Authers, who writes the “Markets Insight” column for the Financial Times of London. On 22 February, his column discussed the publication of this year’s edition of the Global Investment Returns Yearbook produced annually for Credit Suisse by the Elroy Dimson, Paul Marsh, and Mike Staunton. Historically they have looked at Continue reading →

What You See …

By Edward A. Studzinski

“If you can’t annoy somebody, there’s little point in writing.”

       Kingsley Amis

These days, given the continuing march of new highs in the market indices, coupled with the ongoing extremes of most valuation metrics on individual securities, there is not a lot for a conservative investor to say that hasn’t been said before. What is different this time is the continuing flight from higher fee investment vehicles by both retail and institutional investors. And that money is flowing either into exchange-traded Continue reading →

Conflicts and Contradictions

By Edward A. Studzinski

“Success is never final. Failure is never fatal. It is courage that counts.”

        Winston S. Churchill

Some time ago, I was surprised by a conversation with my colleague Charles, finding him quite incensed about a visit he had made to a money manager, one of a series of such encounters that began at the Morningstar conference this year. It appears to have been a disconcerting discovery to Charles that the firm in question, rather than lowering their fees, which fell somewhat on the high side, preferred to keep the fees high so as to support the high life. Charles would define the high life as expensive office space in the high-rent district, along with a propensity for displays of Continue reading →

Rearranging the Deck Chairs

By Edward A. Studzinski

“In wars then let our great objective be victory, not lengthy campaigns.”

                  Sun Tzu, The Art of War

Another year-end is in sight. Those of us who have been conservative in our asset allocations and predicting the end of the world have once again it seems, been proven wrong. Or perhaps not, for as the market keeps rising, the breadth keeps getting narrower. Or least it had been. It begs the question of whether we are setting up for a blow-off, heading straight up through year-end, or something else.

Attached is a Continue reading →

Fall Frolics

By Edward A. Studzinski

“Maybe this world is another planet’s hell.”

                                 Aldous Huxley

Investment Committees and Performance

We are at that point in time when investment returns trickle in from the endowments of schools and other not-for-profit organizations for their fiscal years ending June 30, 2017. In terms of preliminary numbers, the top ten college/university endowments had total returns Continue reading →

“One for the Gipper”

By Edward A. Studzinski

“There is much to be said in favor of modern journalism. By giving us the opinions of the uneducated, it keeps us in touch with the ignorance of the community.” Oscar Wilde

A recurring theme in investment letters, usually when one suspects that performance or personnel issues (often directly related) need to be glossed over, is a discussion about the need to have “team players” in the investment management and research process. Now there were hedge funds, such as Tiger Management in its heyday and Maverick Capital which used to make a virtue of recruiting former athletes in high school or Continue reading →