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.
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is “the uncritical acceptance of the intellectual climate of our own age and the assumption that whatever has gone out of date is on that count discredited.”
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.
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.
The year 2008 and the subsequent Global Financial Crisis (GFC) stand as a watershed moment in the annals of our capitalist society. It was a bailout prompted by poor capital allocation, deficient risk management, and unchecked greed.
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!
The paradox that this marriage potential created at the college was that the odds are good, but the goods are odd. This is the statement that can be made for common stock investing today.
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.
In the early 2020s, the stock market looked much like basketball used to: a big man’s game. As examples, money management firms like Vanguard and Blackrock lumbered to higher heights of assets while the passive firms swallowed more market share.
To kick off the beginning of 2023, there continues to be a bias we see in equity investor portfolios. These portfolios have many of the traits investors see at the endpoints of the economy like software, consumer products and computer chips.
What must happen to make these stocks attractive to investors like us?
The news of the shocking OPEC+ announcement of a supply cut is saturating the minds of investors and market prognosticators.
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.”
The events that began with Thursday’s tumult in financial stocks and precipitated the FDIC takeover of Silicon Valley Bank and Signature Bank were swift.
There were many good things to think about from Warren Buffett’s letter to shareholders which came out recently. In this piece, we’d like to drill down on two subjects that Buffett highlighted.
As a young stockbroker in the 1980s, I was very enamored with T. Boone Pickens.
On February 5, 2023, Charlie Munger sat down as the Chairman Emeritus of the Daily Journal Corporation (DJCO) to answer questions from shareholders and the public.
We are closing in on what we think may be the question of the decade. If a majority of stock market capitalization in the US is passive or indexed, does this cause problems for stock markets?
A recession is two consecutive quarters of economic contraction.
In 1817, David Ricardo developed his theory of comparative advantage to explain why countries engage in trade together, even when one country has an absolute advantage.
As we start the year 2023, we are reminded of the profound poetry from the band, Echosmith, in the song, “Cool Kids.” It can teach us about what it takes to succeed in long-duration common stock investing currently.
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.
I was reminded in a recent read of Robert Hagstrom’s book, Warren Buffett: Inside the Ultimate Money Mind, how Warren Buffett and Charlie Munger define the economic earnings power of a business.
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.
In the 1994 comedy film, Ace Ventura: Pet Detective, Lt. Einhorn is the female leading the Miami police’s investigation of the disappearance of the Miami Dolphin’s mascot, Snowflake.
The era of the dynamic sales growth tech company, with a religious quality to its leadership, appears to be over.
If you were walking down the street and saw a $100 bill just sitting near the curb, would you pick it up?
Newton's First Law of Motion states that an object in motion tends to stay in motion unless an external force acts upon it.
The investors in the Smead International Value Fund have asked our team at Smead Capital Management what looks attractive today.
We are at the point in this nasty bear market where those who are buying the glamour tech stocks of the last ten years (on the way down) are at a crucible.
The investors of Smead Capital Management have been hearing us talk about ‘First World Problems’ recently.
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.
While reading Jeff Nussbaum’s new book Undelivered, I came across the story of Boston’s Mayor Kevin White and the 1974 busing of Boston public school students.
We are getting questioned constantly on how long this bear market in U.S. stocks will continue.
As we’ve hit the halftime mark for the investment year 2022, we are faced with a daunting two-headed monster.
Chairman and largest shareholder, Harold Hamm, is trying to own our shares of Continental Resources (CLR US) at a price of $70.
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
Academics argue that there are three proven factors of investing: Value, quality and momentum.
Virtual reality is not reality!
The future is always unknown.
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.
Moving forward beyond the pandemic of 2020, the theme the world woke up to is that people want more…more home, more land, more entertainment, more goods.
As a firm, we refrain from delving into politics and political debates.
The news of Berkshire Hathaway’s purchases in Occidental Petroleum (OXY) has been seismic in our minds, but to most investors it has been but a whimper
Totally Addressable Markets (TAM) are at the heart of what Charlie Munger calls the biggest euphoria episode he has ever seen in his career. We believe that the coming stock market failure emanating from the over-pricing of the U.S. stock market is closely tied to TAM.
