Commentary

The Genesis of Our Stock Selection

We have gained a number of new investors and get regular vetting interest from investors who need to understand the roots of our stock-picking discipline.

Commentary

Bill Walton’s Insane Brilliance

The news of Bill Walton’s death from brain cancer hit me hard. In the Portland Memorial Coliseum, there were 12,665 seats, and I had one of those top-row nose-bleed seats for the sixth game of the NBA finals in 1977.

Commentary

Only Dave Cuts the Federal Budget

Back in 1993, a brilliant satirist by the name of Ivan Reitman produced a movie called Dave. It was the story of a life-threatening stroke besetting the President of the United States of America.

Commentary

Buffett and Munger Mark the End of An Era

At the Berkshire Hathaway Annual Meeting we marked what we believe is the end of an era both for Berkshire and for the S&P 500 Index.

Commentary

1968-1969: Buffett and Price Agreed

The most interesting thing about 1968-1969 was the agreement about the stock market future between the greatest growth investor at that time, T. Rowe Price, and the greatest value investor of all time, Warren Buffett.

Commentary

DXYZ: An Old Form of Ignorance

Many investors are bullish, or not fearful, of the future of stock returns. At Smead Capital Management, we continue to explain to our investors how poor the outcomes will be. Some ask when this view will change.

Commentary

Hit Them Where They Ain’t

As a child, baseball became the core of my life. Collecting baseball cards, watching games on TV, and playing in Little League and neighborhood games absorbed my time outside of grade school. Out of this came a desire to know baseball history and become a statistics junkie.

Commentary

Saved by Zero

The U.S. Federal Government has set a net zero carbon goal by 2050. Tremendous resources have been applied with borrowed money to fund these goals and subsidize money-losing green investments.

Commentary

Looking for the Outsiders

William Thorndike’s book The Outsiders has been considered a classic for some time now. His story teaches readers about the business performance of Henry Singleton, Katherine Graham, John Malone and Daniel Burke.

Commentary

Lonely Contrarian Divergence

In previous missives, we have gone into considerable detail regarding the historic ascent of index concentration, coupled with the heightened prevalence of passive investing.

Commentary

A Ticket to Purgatory

The Sherman Antitrust Act was created to stop our democratic republic from being ruined by “the concentration of capital in vast combinations.” The fear was that if too much of the success of industry went to too few people, our system would get disrupted.

Commentary

Drivers and Stock Pickers

In studies, 90% of drivers think they are above average. We believe that 100% of the people who pick stocks for a living think they will be above average.

Commentary

Chronological Snobbery

C.S. Lewis coined the term ‘chronological snobbery’. According to Lewis, the definition of chronological snobbery is “the uncritical acceptance of the intellectual climate of our own age and the assumption that whatever has gone out of date is on that count discredited.”

Commentary

Stock Market-Interest Rate Rhymes

Warren Buffett regularly reminds his shareholders that interest rates are a gravitational pull to stock prices. History shows that the movement of stock prices and interest rates don’t necessarily happen simultaneously but play out over time.

Commentary

70/20/10 Rule Redux

A friend of our stock picking discipline reminded us of a very important force in the stock market. It was called the 70/20/10 rule, and it was promoted by Roger Edelman, Richard Evans and Gregory Kadlec in an early 2013 Financial Analysts Journal article.