Monthly Commentaries

“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 […]

“Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” …Will Rogers I recently read an article that compared investment marketing to the manufacture of fishing lures. The comparison, so the article goes, is that the […]

“The investor’s chief problem and even his worst enemy is likely to be himself.” …Benjamin Graham There’s an old saw about two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys, how’s the water?” And the two young fish swim […]

“There are two different types of people in the world, those who want to know, and those who want to believe.” …Friedrich Nietzsche Laurus prefers to describe our investments as “emerging blue chip companies” as opposed to the traditional industry term “small cap”. Our deep fundamental investment process uncovers businesses that create long‐term wealth for […]

“The thing I find most interesting about investing is how paradoxical it is: how often the things that seem most obvious—on which everyone agrees—turn out not to be true.” …Howard Marks One of the most misunderstood investment allocations in Canada is Canadian equity. Over the past few years, institutional investors have been reducing their Canadian […]

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” — Peter Lynch A recent blog post by Sam Altman, CEO of Y Combinator, turned the phrase “the days are long but the decades are short”. Now, being admittedly sardonic, Sam is […]

“The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.” — Benjamin Graham While we seldom like to make specific market comments, the recent deterioration in stock prices merits a brief observation. At mid‐year, the SP500 Index was 75 […]

“In business, I look for economic castles protected by unbreachable moats.” — Warren Buffett Webster’s dictionary defines a moat as “a deep, wide ditch that is usually filled with water and that goes around the walls of a place (such as a castle) to protect it from being attacked” (emphasis added). Obviously, the wider and […]