bullmarkets
Stock prices are up because technological innovations have the potential to bring in an era of increased economic productivity. Stock prices are up because world leaders are working to secure peace agreements. Stock prices are up because inflation is under control. There’s always a reason. Humans have a deep need to make sense of the world about them. So, when stock prices rise, we advance and then come to believe in explanations for the price increases. What we do not do is to submit those explanations to the scientific scrutiny that would be needed to verify them as accurate. Q3 2022 hedge f...
ValueWalk
Dear fellow investors, At Smead Capital Management, we practice our discipline of picking and owning stocks which meet our eight criteria in both favorable and unfavorable environments. The current “blithe spirits” were brought to mind in a movie of the same name. The main character, a novel writer, is visited by his dead ex-wife, played brilliantly by actress, Leslie Mann. At first, she charms her widowed and re-married husband, but then she haunts him and his new wife, leading to their ultimate death. Q3 2021 hedge fund letters, conferences and more This is exactly how bull markets work. The...
ValueWalk
Irrational Exuberance was a good title for Robert Shiller’s book “revolutionizing” (that word appears in the subtitle) our understanding of how the stock market works. It gets to the key question. The Buy-and-Hold Model is rooted in a presumption that investors are rational. If that were so, stock prices would only rise when there was an increase in economic productivity. Shiller’s term makes the point that we cannot count on gains greater than those usually produced by economic gains to remain in place. [soros] Q1 2021 hedge fund letters, conferences and more Scary High CAPE ValueSo the term ...
ValueWalk
Strategic options, in terms of corporate strategy, are small enough bets that a company can make and still walk away from them even if they don’t work out as planned. Jeff Bezos is probably the best proponent of this strategy. Although his bets are in the billions of dollars, he’s not afraid to experiment and to learn from his failures. He understands that by taking a series of small bets you increase your likelihood of achieving success in the long-term. If you’re not continually experimenting you risk becoming complacent. The biggest mistake most management teams make is believing that their...
ValueWalk
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