Monthly Commentaries

In our commentary last month, we introduced the concept of moats and knights – companies with defendable, competitive moats and the “knights” whose sole purpose was to widen them. This month, we’ll further discuss these defenders of the realm; how to identify them and how to ensure quality and integrity is more important to them […]

With the highly acclaimed television series “Game of Thrones” beginning their seventh season in July, we are reminded of the above lesser-known Buffett quote. While there are plenty of investment firms suggesting investment in “moats”, there has been little explanation on how a company establishes a moat or, more importantly, defends one. Perhaps there are […]

It’s hard to fathom that Y2K was seventeen years ago. Remember the widespread fear that technology would collapse around us in the belief that everything that computers touched would be engaged in a catastrophic breakdown as the date changed from 1999 to 2000? Of course, with the exception of some minor software glitches the millennial […]

The new issue of Research magazine is now available and its theme is evidence-based investing. The issue included a great article from Bob Seawright (CIO of a San Diego advisory firm). We can’t fit the entire article here and recommend you take a look at the magazine in its entirety. “I realized technical analysis didn’t […]

If you were investing your own money, what type of investor would you be? Are you the conservative type – one who looks for an investment to generate cash flow while appreciating in asset value – or the aggressive type who looks for the “big win”? “Intrinsic value can be defined simply: It is the […]

I’ve always been a fan of Charley Ellis. He has constantly challenged our industry to be better, criticizing the inability of the investment management business (he prefers to call it a business rather than a profession) to beat the market. He, like many other investors, has a bias for passive investing. He contends that increasing […]

A great deal has been written and discussed about the move toward passive investment. A recent Bloomberg article written by Barry Ritholtz quoted Bill Miller, legendary US stock picker, as saying the shift is not really from active management to passive but from expensive passive investment management to inexpensive passive management. Miller suggests about 70% […]

“In money management what sells is the illusion of certainty.” …John Hempton There has been a great deal of chatter recently on whether an investment process focused on acquiring “quality companies” (high future returns on capital through sustainable competitive advantage) is more marketing spin than reality. Much has been discussed about the sustainability of high […]

“In Ajit, we have an underwriter equipped with the intelligence to properly rate most risks; the realism to forget about those he can’t evaluate; the courage to write huge policies when the premium is appropriate; and the discipline to reject even the smallest risk when the premium is inadequate. It is rare to find a […]

“Most of the annual variation in [investment] performance is due to luck, not skill.” …Bradford Cornell, California Institute of Technology As we’ve written in the past, in investing we generally underestimate luck. Even more interesting is the human tendency to attribute poor results to bad luck and good results to skill. Understanding the relative contributions […]

“Chicks dig the long ball” …Greg Maddux, 1998 Nike commercial In a recent call with investors, Byron Wien, chief strategist of Blackstone, was asked why active managers don’t outperform their index benchmarks. He provided three explanations — two well‐worn, the third more novel. First, he said, a clients’ tendency to dwell on short‐term results penalizes […]

“A turkey is fed for a thousand days by a butcher; every day confirms to its staff of analysts that butchers love turkeys “with increased statistical confidence.” The butcher will keep feeding the turkey until a few days before Thanksgiving. Then comes that day when it is really not a very good idea to be […]