Trends & Tail Risks

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 […]

PRICES ALLOCATE RESOURCES

By LEWIS JOHNSON – President, Co-Founder & Partner  |  June 25, 2014 Prices are everywhere.  We pay prices when we want to buy things such as groceries, cars, houses, stocks and bonds.  But what else should we consider with respect to prices?  Prices are also the most powerful and efficient allocator of resources […]

SIMPLICITY

By LEWIS JOHNSON – President, Co-Founder & Partner |  June 18, 2014 “You do not really understand something unless you can explain it to your grandmother.” Albert Einstein Sometimes it’s very difficult to get down to the simple fundamental truths that underlie even the most complex situations. Nowhere in the financial world is […]

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 […]

GHOSTS OF INVERGORDON?

By LEWIS JOHNSON – President, Co-Founder & Partner  |  June 4, 2014 Mark Twain once said, “History does not repeat itself but it does rhyme.”  This week we examine a precedent from 1931 for clues to the political debate underway now in Europe. We consider whether recent elections in Europe are ‘rhyming’ […]

MAKING VOLATILITY OUR FRIEND: TRADING THE KITCHIN CYCLE

By LEWIS JOHNSON – President, Co-Founder & Partner  |  May 28, 2014 Cycles and their changing phases are everywhere around us.  The twenty-four hour daily cycle comprises the opposites of day and night.  The seasons transition from the cool of winter to the opposite heat of summer, before swinging around again back […]

BIG PROBLEMS START SMALL

By LEWIS JOHNSON – President, Co-Founder & Partner |  May 21, 2014 Last week the Greek bond market took a beating after almost two full years of constant improvement.  This week’s Trends and Tail Risks explains why you should care and what we are watching for next.  The chart below shows the […]

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