News

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

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

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

In our last article we covered the Bubble in “Safe” Stocks, where investors are paying outrageously high multiples for companies that are believed to be more recession resistant such as consumer staples.  In this article I figured I’d cover a stock Mr. Market and the doom and gloom propagandists view to be “risky” based on...Read More

Since early March, the stock market has been far more driven by fear than fundamentals, which has led to what I believe to be a bubble in stocks perceived as being “safe.”  When you pay 50% too much for a stock, a simple reversion to the mean can cause disastrous permanent losses of capital.  Conversely,...Read More

This morning we woke up to the news that JP Morgan has purchased the vast majority of the assets and deposits of First Republic with the help of the FDIC bank-funded insurance fund.  This deal removes the last lingering overhang from the panic-induced bank runs that we saw in early March, which led to the...Read More

On Friday several of the big banks reported earnings that were exceptionally strong, highlighting their strength in times of turmoil.  I believe that much of hysteria we saw in March was manufactured panic to a large extent.  Several horribly managed banks were taken out by bank runs and the problems were extrapolated incorrectly to the...Read More