“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 →
“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 →
An instance of an
Inability to recall
Makes one wonder if it
Really happened at all
Momentary by J.P. Niemeyer, 10/28/2019. Niemeyer is a retired naval officer living in Japan who writes about Japan regularly for Red Star Rising.
So, another year, and for Continue reading →
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 →
“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)
Horizon Kinetics, in its Q3 Commentary, again did a superb job of raising issues that investors should be Continue reading →
“A democracy is a government in the hands of men of low birth, no property, and vulgar employments.” Aristotle
One of the more interesting exercises in the consumer brands space in recent years has been the efforts of companies to update brands to be more Continue reading →
“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 →
“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 →
“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 →
“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 →
“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 →
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 →
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 →
“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 →
“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 →
Snow on the pines
Thus breaks the power
That splits mountains.
Otaka Gengo Tadeo (one of the forty-seven samurai).
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 →
“In three words I can tell you everything I have learned about life. It goes on.”
Robert Frost
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 →
“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 →
“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 →
“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 →
