One of the very popular technology companies in recent years has been CrowdStrike, Inc. It provides cybersecurity to numerous major technology companies including the top Artificial Intelligence (AI) players.
In a recent The Wall Street Journal article, Jason Zweig correctly pointed out that 85% of active stock-picking funds and ETFs had underperformed their benchmark.
We are contrarians and oddly crave the moments when history, psychology and mathematics get defied in the U.S. stock market. We believe this is one of those points in time.
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.
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.
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.
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.
The most famous “Hail Mary” in American football history happened in 1984. On the very last play of the Boston College football game, an undersized quarterback named Doug Flutie threw a bomb into the end zone to teammate Gerald Whelan. Boston College had won the game!
Watching Warren Buffett and Charlie Munger Saturday in Omaha caused us to think about a very popular 1960s TV show called, “The Dating Game.” Hosted by Jim Lange, the game was played with the host on one side of a wall with a male or female contestant.
We have been reminding everyone that we believe we are unwinding a financial euphoria episode that Charlie Munger called the biggest of his career, “because of the totality of it.”
It appears to us at Smead Capital Management that investors are behaving in a way that will damage their capital and cause them to suffer stock market failure.
The Wall Street Journal reported last week that the National Association of Home Builders’ (NAHB) sentiment about the future was 33% and at its lowest since 2012.
The era of the dynamic sales growth tech company, with a religious quality to its leadership, appears to be over.
Newton's First Law of Motion states that an object in motion tends to stay in motion unless an external force acts upon it.
Thanks to reading Spencer Jakab’s book, The Revolution That Wasn't, we've been thinking about what it is like to be in a short position when overwhelming demand affects prices.
The current stock market circumstances have created an incredible contrast between what investors say they think about the stock market versus what they are doing with their capital.
We believe one of the hardest things to do in common stock investing is to hold winners for a long time. This is especially true with what are normally cyclical industries.
We are getting questioned constantly on how long this bear market in U.S. stocks will continue.
Someone once said, “Better than being smart is knowing who is!”
Over the last four years, we have argued that the glamour monopoly technology companies have a low multiplier effect in the U.S. economy
Virtual reality is not reality!
After listening to the Berkshire Hathaway Annual Meeting on April 30, 2022, we thought it would be appropriate to frame the aggressive buying of Occidental Petroleum (OXY) and Chevron (CVX) in the first quarter of this year.
In 1980, when I came into the investment business, investors were very conscious of trading ranges that had existed the prior 16 years.
As a firm, we refrain from delving into politics and political debates.
In our recent media engagements, we have been asked if the Russian invasion of Ukraine is the cause of the carnage in the stock market this year.
We operate under the premise that alpha can be generated by stock selection, courage, concentration, and long-duration holding periods.
We were watching CNBC recently and an analyst mentioned what practically nobody besides us has said.
On April 12, 2019, Chevron (CVX) and its CEO, Mike Wirth, offered $33 billion dollars to buy the common shares of Anadarko Petroleum.
Most professionals who employ our strategy are wide-asset allocators
We have entered the phase when the body politic and public opinion are aware that Facebook is disturbing our society. This is very important to us as investors, because the big tech companies make up a disproportionately large part of the S&P 500 Index.
The media and the economics profession are treating inflation like it is a friendly puppy dog. They think you can take it out of its pen and play with it for a while. The popular theory is that you bring it out in a severe dip in economic activity and when the economy gets back on its feet, you kindly ask inflation to crawl back into its pen like any good puppy dog would do.
Let us share some of the “bizarre red-blue lights flashing” in the S&P 500 Index.
In the summer of 2020, we didn’t know quite a few things about how Americans would react when they got their social and entertainment choices back.
We’ve been thinking about John Locke’s “Law of Fashion” in the context of the U.S. common stock market.
The great philosopher, John Locke, brilliantly captured the way the world works.
Halfway through the year 2021, we must be reminded to “not confuse brains with a bull market.”
We have been long-term owners of Amgen (AMGN), Merck (MRK) and Pfizer (PFE) among the major pharma/biotech companies
Now that investors are reconsidering active stock picking and are especially interested in value stock strategies, let’s analyze where excess stock market returns come from.
As Amazon prepares to buy MGM Studios and announced an effort to put pharmaceutical stores all over the U.S., we are reminded of one of my favorite comedy movies, Silent Movie
“History doesn't repeat itself, but it often rhymes.” – Mark Twain
As we enter 2021, it appears that Buffett had things upside down in 2020. The things which had gone up the most by the end of 2019, went up the most in 2020.
In all this tech euphoria and COVID-19 quarantining, investors are missing a key fact. People need people.
Everyone who owned common stocks in the U.S. went through hell in the first quarter of this year. The 36% decline in the S&P 500 Index in February and March was the fastest 36% decline of my lifetime. This hell was especially damaging to those of us who have a positive view of the U.S. economy over the next ten years.
One of our favorite financial writers is Bloomberg’s John Authers. He recently wrote a tongue-in-cheek article about an investment company by the name of Hindsight Capital. In hindsight, or in the company’s case, Hindsight Capital, he talked about what the firm did and what you should have done over the last ten years to produce outstanding returns.
We have argued recently that since almost nobody is worried about inflation, there are wonderful opportunities for investments which would benefit from the crowd being wrong.
Walmart (WMT) recently made it clear to vendors that they should “get off” Amazon’s Cloud. This was one of two announcements which speak to the competitive landscape of business in the U.S. The other announcement came earlier when Amazon (AMZN) disclosed an agreement to buy Whole Foods (WFM) for $42 per share in cash.
At the end of my freshman year in college (1977), my brother-in-law’s twin brother called me to ask if I wanted to go to the sixth game of the NBA Finals in Portland. I was a huge Trailblazer fan and was thrilled to sit in the top row of Memorial Coliseum, which held 12,665 fans. Not only was it an unbelievable experience for a lifelong fan (the Blazer’s won), but it was even more powerful because professional basketball was “the only game in town.” No other major professional sport (football, basketball, baseball) existed in Portland in 1977 and there is only one in town today.
We have a severe housing shortage in the U.S. which will take years to solve. It should drive economic growth for the next decade, provide good quality jobs and promote confidence which we’ve lacked since the financial crisis of 2007-2009.
