Category Archives: Edward

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 →

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 →

Beginning of the End or End of the Beginning?

By Edward A. Studzinski

“Men become civilized, not in proportion to their willingness to believe, but in proportion to their readiness to doubt.”

H.L. Mencken, “What I Believe,” The Forum 84 (September 1930), p. 136

Is it different this time? We have made it to the end of August. Many investors have endured roller coaster rides in their portfolios. The year-to-date return for the S&P 500 Index, according to Bloomberg, is 16.74% through the end of August. The total return for the Vanguard Admiral Shares – S&P 500, charging just 4 basis points, is 18.33%. Many active-managed Continue reading →

Potpourri

By Edward A. Studzinski

“Dogs look up to you, cats look down on you.  Give me a pig.  He just looks you in the eye and treats you as an equal.”

                    Winston S. Churchill

I thought I might follow David’s call for a high summer issue that offers our readers “a bit of a breather.” After due consideration, I decided to write a bit about candy and common sense, wine and changing tastes, and the struggle of value investors to deal with changing tastes, changing markets and Continue reading →

One Hand Clapping

By Edward A. Studzinski

“In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” Winston S. Churchill to Josef Stalin, concerning plans for coordinated deception, at a party celebrating Churchill’s 69th birthday, 30 November 1943

The second quarter of the year has provided investors with a variety of results, as well as a variety of Continue reading →

What Color Are the Swans?

By Edward A. Studzinski

 “Bureaucracy is a giant mechanism operated by pygmies.”

     Honoré de Balzac, Epigrams (trans. Jacques Leclercq, 1959)

When last our heroes met at the end of April, the market had been on a tear pretty much since the beginning of the year. Many domestic funds were showing total returns in the high teens. International funds were likewise showing total returns in the vicinity of twenty percent at April 30th. Active fund managers, to the background music of “Happy Days are Continue reading →

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 →