I wanted to share with you my interview with my friend Bob Huebscher who runs a terrific website Adviser Perspectives. I am very excited about this interview because in a very unconstrained format we had a chance to discuss Paul Krugman’s latest bearish article on China, the linkage between the European crisis and Chinese and [...]
I am bored and exhausted. I am on my third cup of coffee, but my lack of excitement has not changed, as I am about to explain why the sleepiest, most boring stock in the universe—Microsoft Corp.—offers a very compelling r eward with very reasonable risk. Microsoft was the bright light in the tech firmament [...]
There is a good reason John Lennon wrote “All you need is love.” We want to be loved and usually gravitate toward people and things that others cherish. But when it comes to investing, love is not cheap. The trick is to identify misplaced (or mispriced) hate that will turn into love. This brings us [...]
CNBC interview discussing sideways markets, Xerox, HP, Vivendi
Interview with Matt Nesto, segment 1: HP, Xerox, Vivendi (we own all of them) Segment 2: China
Most CEOs are not good capital allocators when it comes to their stock: They are not objective analyzing their company and thus not objective in share buyback. In majority of cases they think their stock is a buy all the time. Why? Because they spend long hours trying to grow the business, they keep telling [...]
Anger and frustration are the two emotions pulsing through my veins as I write this. HP, once the symbol of innovation, is being dismantled by its high-pedigreed board and the CEO of the hour (I truly hope his tenure will be measured in hours, not years). I vividly remember the early 2000s, when Carly Fiorina, [...]
I looked at Brown & Brown about a year ago (May 2010), here are my thoughts which are still relevant today: Risk of growth by acquisition Very significant portion of Brown & Brown’s (BRO) growth in the past came from acquiring brokers. I am naturally skeptical of sustainability of this type of growth as it [...]
This is the letter we wrote to our clients in the first quarter of 2011. It discusses the importance of international investing and our purchase of a UK retailer, Halfords PLC. If you want to read a shorter version, I’ve turned it into an article that was published in the June issue of Institutional Investor, [...]
Markets are efficient, or so we’ve been told. I am not here to put a rebuttal to this academic nonsense, but let me give you one of the core reasons why markets are and will remain inefficient: because human beings are efficient. To function in everyday life, our brains are used to simplifying complex problems, [...]
I am back! It was an amazing trip. It started with Warren Buffett’s Omaha. I flew into Omaha on Thursday morning, and a few hours later received a call from the CFA Society of Nebraska, asking me to give a talk to their members. Whitney Tilson and his partner Glen were supposed to do a [...]
When I wake up in the morning and check news for the companies I own, I worry. I don’t worry that my companies missed their quarterly guidance by a few pennies – running a business is an art, and things don’t usually work out in a precise, linear fashion. The companies that have a “deliver [...]
I’d like to share excerpts from our quarterly letter we send to our clients (this is Part 1; I’ll send out Part 2 in a few weeks). I’m not sharing the full letter for a simple reason: we are still accumulating shares in some stocks mentioned in the letter. Purchase of Big Lots Big Lots [...]
I was quoted in FT about David Sokol, CEO of a Berkshire Hathaway subsidiary, buying shares in Lubrizol a few months before Buffett’s Berkshire Hathaway bought Lubrizol at a significant premium, which made Sokol 3 million dollars on his $10 million purchase. “Some investors expressed concerns about Mr Sokol’s actions. ‘Any time you buy stock [...]
The Ups and Downs of Flying I am a very nervous flyer. Whenever there is a little bit of turbulence, I look out the window, see shaking wings, and start to wonder whether they’ll keep holding the plane up. Then my rational self kicks in, and I tell myself that statistically it is safer flying [...]
Know these names? The Way to Wealth, The Intelligent Investor, One up on Wall St, Stocks for the Long Run ? They’re all books that redefined investing for their time. But they may be headed for the history section. A new little book is threatening to turn all that sage advice on its head. We’re talking about Vitaliy Katsenelson’s “The [...]
I love Barron’s. I really do. I read it from cover to cover, and I truly believe it is one of the few business publications that knows the difference between a good company and a good stock. Now that I’ve sugared it up, let me tell you this: its article on Medtronic is wrong!
On BNN TV (Canadian version of CNBC) discussing sideways markets and my favorite stocks
I have tremendous respect for Mr. Buffett. But every word that comes out of his mouth should not be looked upon as prophecy, or the gospel truth. I get a feeling that Buffett has been canonized into a value investor saint – investors and the media worship the ground he walks on and the air [...]
I understand why investors don’t want to own Pfizer (PFE); there is little excitement in the stock: It is down significantly from the Viagra-high it reached in 1998. Yes, Pfizer is the maker of Viagra, the drug that spawned a slew of commercials that made TV unwatchable (especially if you have little kids who ask [...]
It was announced Thursday that IMS Health was to be stolen from its shareholders for $4 billion or about $22 share; a private equity firm will buy them out. IMS Health should have free cash flows this year over $340 million (the actual number should be higher than $400 million, but is benefited by a [...]
I was on BNN (a Canadian version of CNBC) today (click here to watch), discussed American Express (AXP). Why it is a good company, but a fairly valued (at best) stock.
Financial stocks had a huge run up from their bottom. Many have doubled and tripled, but are they still cheap? It’s almost impossible to value big financial institutions like Citigroup (C), Bank of America (BAC), or Goldman Sachs (GS) — they’re a lot like hot dogs — you don’t really know what’s inside of them; [...]
Given my usual warning, I don’t want to discuss politics in my writings for two reasons: it bores me to death and I’ll upset 55% of my readers. But an investor cannot ignore politics especially today. What happens in Washington doesn’t stay in Washington. In his healthcare proposal President Obama is using a tactic described [...]
IMS Health (RX) did not have a spectacular quarter to put it mildly. Revenue decline (on constant currency basis) accelerated to 4% from a 2% decline last quarter. Pharmaceutical companies are becoming more stingy and thus RX’s business got pinched. However, most of the revenue damage is taking place on the consulting side of the [...]
I’ve received a few emails asking my thoughts on Microsoft’s (MSFT) quarter. Here is my take: this is probably the least meaningful quarter in the company’s recent history. MSFT is about to introduce Windows 7 (and a slew of other products.) If I were a corporate customer, I wouldn’t be buying Windows Vista now if [...]
It is interesting to observe the excitement the Street has with Caterpillar’s (CAT) earnings. They were better than company thought last quarter, but sales were still down 41%. I have to give CAT credit for cutting costs as much as they did. But here is what caught my attention in the quarter: the area that [...]