Trends & Tail Risks

SIR ISAAC NEWTON: VISIONARY SCIENTIST, LOUSY INVESTOR

By LEWIS JOHNSON – President, Co-Founder & Partner  |  August 27, 2014 “I can calculate the movement of stars but not the madness of men.” – Sir Isaac Newton Sir Isaac Newton’s genius was staggering. In the early 1700s, he created the scientific method by which all science proceeds through hypothesis testing and […]

GOLD: LESSONS FROM THE DEPRESSION

By LEWIS JOHNSON -President, Co-Founder & Partner | August 20, 2014 Last week’s Trends and Tailrisks noted that there is more money to be made being long the solution than there is in shorting the problem. We are convinced that over indebtedness is the world’s greatest financial problem. Weakening credit quality […]

CREDIT: CAUGHT LEANING?

By LEWIS JOHNSON – President, Co-Founder & Partner |  August 13, 2014 They would say, when Whitey Ford made that incredible motion to nip the base runner off first, that the man was caught leaning. The man was leaning one way, and realized what was happening, and yearned to go the other way, […]

IS CREDIT QUALITY PEAKING?

By LEWIS JOHNSON – President, Co-Founder & Partner  |  August 6, 2014 “Formal education will make you a living; self-education will make you a fortune.” Jim Rohn The U.S. stock market just suffered its worst week in more than two years.  Is this just short term volatility, or is there a deeper […]

QUANTITATIVE EASING: PERCEPTION VS. REALITY

By LEWIS JOHNSON – President, Co-Founder & Partner  |  July 30, 2014 The US Federal Reserve’s Quantitative Easing (QE) program of bond buying has been one of its most controversial policies in recent years. In this week’s Trends and Tail Risks, we examine QE by studying its impact upon the yield of 30-year […]

GOLD: PRICE VS. RELATIVE VALUE

By LEWIS JOHNSON – President, Co-Founder & Partner  |  July 24, 2014 After a long hiatus, gold’s quiet outperformance (up 9.6% YTD) is slowly working its way back into the financial pages. However, gold took its time getting back there. After all, the price of gold fell 38% from its peak in […]

THE POWER- AND ILLUSIVENESS- OF LONG TERM COMPOUNDING

By LEWIS JOHNSON – President, Co-Founder & Partner  |  July 16, 2014 Financial history is fascinating. History offers nearly endless lessons from which we can learn, if we would only but study them. Of all the examples of financial history I have studied, one of the events that I have pondered the most was the […]

FROM THE ANALYST’S TOOLKIT: REPLACEMENT COST VALUATION

By LEWIS JOHNSON – President, Co-Founder & Partner  |  June 11, 2014 Investing is an exercise in decision making under uncertainty.  We use a variety of tools to minimize uncertainty and increase the odds that our investments are successful.  One of the most important tools is valuation, the act of calculating what a company […]

“PRICE IS WHAT YOU PAY; VALUE IS WHAT YOU GET.”

By LEWIS JOHNSON – President, Co-Founder & Partner  |  July 9, 2014 As value investors we sometimes find ourselves in the most obscure parts of the market. We end up there by design, because we are constantly seeking to limit downside risk by investing in securities that are the most undervalued. After […]

THE MOST IMPORTANT QUESTION IN INVESTING RIGHT NOW

By LEWIS JOHNSON – President, Co-Founder & Partner  |  July 2, 2014 Last week we explored commodity prices to illustrate simply how supply and demand interact with prices to drive real responses in the economy.  Prices make things happen!  There is a deeper truth, however, behind all commodity prices, a secular driver […]

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