The top 10 stocks in the S&P 500 now account for more than 1/3rd of the value of the S&P 500.  Valuations in this group are vastly elevated compared to their historical levels, highlighted by Nvidia trading at a staggering 41 times sales.  It’s hard not to compare today’s environment in the large cap Technology...Read More

Today I had the opportunity to do the podcast Value After Hours with Tobias Carlisle and Jake Taylor.  We discussed current market valuations, the banking “crisis”, the opportunities we are finding in high-yield bonds, ALLY Financial, etc.  I hope that you enjoy!   Podcast VideoRead More

You likely are sensing a bit of a theme with recent articles discussing what I believe to be a pretty substantial equity bubble, centered on the Megacap stocks dominating the market.  To be clear, I think there is still value in some of them, and we actually own some of them, although our exposures are...Read More

Today I was reading an interesting article in the WSJ describing the increased risk-taking that many retirees and near-retirees are taking with their investment portfolios.     For instance, “nearly half of Vanguard 401(k) investors actively managing their money and over age 55 held more than 70% of their portfolios in stocks.  In 2011, 38% did so.  At...Read More

The YTD rally in the S&P 500 has been dominantly comprised from the performance on the top 8 stocks, all of which performed poorly last year.  This is by far the narrowest rally since the Tech Bubble, which ultimately culminated in an 80% drop in the Nasdaq.  These stocks are so big and comprise such...Read More

Understanding investor psychology is one of the most crucial elements to investing successfully.  The ebbs and flows between exuberance and pessimism creates both opportunities and risks.  The current equities market is being driven by euphoria surrounding artificial intelligence technology.  The 7 or 8 companies that are perceived to the primary beneficiaries at this early stage...Read More

In our last newsletter we talked about the very exciting and attractive opportunities to invest in quality bonds yielding between 7-11% per annum on a yield-to-maturity basis.  In today’s newsletter, I’d like to discuss some of the high dividend yields that are available currently, which provide both a solid income and appreciation potential.  The stock...Read More

For over a decade, bonds offered a terrible value proposition as the Federal Reserve’s zero interest rate policy compressed yields, creating a major mismatch between opportunity and risk.  Investors weren’t being compensated for the substantial interest rate risks that they were incurring.  Remember, just two years ago, there were roughly $18 trillion in bonds that...Read More

Hope you all had an enjoyable and safe Memorial Day weekend celebrating those that paid the ultimate sacrifice for our country!  I’m glad to see a debt ceiling deal seems to have been agreed upon in principle over the weekend, which hopefully will remove a major headline risk.  It certainly doesn’t resolve any of the...Read More

One of the hardest aspects of investing is dealing with the psychological challenges financial markets present.  Mr. Market’s extreme pessimism or optimism can be contagious at exactly the wrong time, leading to big losses and permanent losses of capital, which are precisely what we are most focused on avoiding.  The current market is being dominated...Read More