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London Value Conference Presentation (Q&A)

I had the pleasure of speaking at the London Value Conference, which was a terrific, first-rate event. I did not make a formal presentation; instead I did Q&A with my friend, the wonderful David Shapiro.   On the morning of the conference (which happened to be midnight in Denver), I found I had a hard time […]

Why I Canceled My Model 3 Order

I put a $1,000 deposit on a Tesla Model 3 the day it was announced. At the time I thought of the Model 3 as a smaller, cheaper version of the Model S. So a few days ago I stopped by a Tesla store to check out the Model 3. I was at the store […]

Exxon Mobil Think Again

General Electric’s collapse should have served as a reminder that buying a company based solely on past reputation and dividend yield is a dangerous endeavor. GE is also a great example that dividends are not paid out of earnings, especially massaged-to-death non-GAAP earnings, but from free cash flows. GE’s non-GAAP earnings were double its dividend payment. This brings us to another American icon […]

How A Stock Market Turns Investors Into Gamblers

Don’t let this wave of stock-market volatility go to your head. The value of the companies in your portfolio doesn’t change by a positive or negative 5% three times a day. Get the value right and the price will follow. For example, my firm recently met with a prospective client, a physicist who has made […]

Welch vs Bezos

A lot of times I won’t have an insight into a business because I don’t understand it or because it’s too complex. General Electric is a great example. As a value investor I should be all over this iconic stock, which is making a generational low. Not at all. I have looked at GE at least […]

Amazon Is Not a Threat to This Industry

Amazon.com has been one of the most innovative and disruptive companies of this century, with incredible success in areas that lie outside of what has been historically perceived as its core business (book selling). Thus every announcement or speculation that Amazon will enter into a particular industry sends stocks of that industry into a tailspin. Investors […]

Options, Hurricanes and Hedging

The purpose of my scribbles is not to provide you with a fish but to teach you how to fish (though sometimes some fish will sneak in). The scribble I am about to share with you I wrote to IMA’s clients in January 2018. Its purpose was to explain why we were going to start […]

What Happened to Invisible Hand?

The Federal Reserve’s changing of the guard — the end of the Janet Yellen’s tenure and the beginning of the Jerome Powell era — has me remembering what it was like to grow up in the former Soviet Union. Back then, our local grocery store had two types of sugar: The cheap one was priced […]

What Will The Stock Market Do Next?

I’ve been asked to comment on the most recent market decline. My initial reaction was, markets go up and they go down. America is a great country but the US Constitution doesn’t guarantee always-rising markets. I sat down and I wanted to write a reassuring message. I wanted to express my empathy. Somehow, I found that my reservoir of empathy was empty: After […]

Antifragility and Value Investing – Part 2

Path dependency is a very important concept. It’s something we constantly think about, and thus, we’ll take a small detour to explore it. In addition to our traditional quality analysis, which falls into three buckets (business, balance sheet, and management), we also look at companies through the slightly different lens of fragility. We owe our […]