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

The image above was presented by famous value investor Richard Pzena.  As you can see, it shows that the best returns from value investing come after periods of stress.  We’ve seen this same phenomena in our portfolios after every major selloff we have experienced over the years.  While this crisis is extraordinary, so it is...Read More

On Saturday, Berkshire Hathaway hosted its annual shareholder meeting, which had a different feel, taking place in an empty auditorium, and without the great Charlie Munger being by his side.  Despite that, the meeting had a lot of great information, during these immensely precarious times.  Overall Buffett, is always bullish long-term on America, and on...Read More

Benjamin Graham (the founder of value investing) originally came up with the concept of margin of safety.  The idea is to buy a security at a large enough discount to its true worth, that you can greatly reduce your chances of losses, while also maintaining a maximum profit potential.  To determine intrinsic value, one uses...Read More

“Those times when you get up early and you work hard, those times when you stay up late and you work hard, those times when you’re too tired and you don’t feel like working and you do it anyway:  That is actually the dream.  The destination is the journey.” —Kobe Bryant   It is a...Read More

I stumbled upon a fantastic article about the Tech Bubble and I wanted to share a few key points with you.  This is relevant because current market valuations appear to be very stretched by most metrics.  After an extremely strong 2019 and nearly an 11-year old bull market, investor optimism is quite high.  It is...Read More

Warren Buffett in July, 1999: “If I had to pick the most probable return over the next 20 year, it would be 6%.” Gallup poll in 1999: “Investors expect stocks to return 13-22% annually.” S&P avg. return from 1999-2019: 6.117%. (Source: Vetle Forsland)   As hard as it is to believe, another decade is coming...Read More

As discussed in our last newsletter, value stocks have roared back strongly to outperform struggling momentum stocks over the last two weeks.  This is only two weeks, but it is worth discussing, because it augurs to how we see the market in the future.  How can we generate the returns we are targeting of double-digit,...Read More

Over the last week, value stocks have poised very impressive gains, while many of the momentum names have really struggled.  This is obviously very good for our deep value investment portfolios.  I want to emphasize, we should never get too excited or upset by short-term performance metrics.  With that said, value stocks are as cheap...Read More

Continued pressure on bond yields and bad economic data out of China and Europe scared the market today, causing a 3% selloff.  While it is a large point drop, it would only qualify as the 342nd largest percentage drop in history.  Stocks got off to a torrid start to the year and it shouldn’t be...Read More