I am sure you have seen the news regarding the failure of Silicon Valley Bank (SVB). SVB has been the victim of an old-fashioned bank run (driven in part by the impact of rapidly rising interest rates, and in part by a non-sticky deposit base tied to the Silicon Valley boom and bust cycle)....
Dear Partners, This past year has been one of the worst for asset markets in over a decade and our core GCI Select Equity strategy was no exception – posting disappointing results. As you know, GCI was founded on the principle that investing in high-quality companies at attractive prices is the most durable and consistent way...
Dear Partners, Our performance in the third quarter of 2022 was disappointing. Our GCI Select Equity composite ended the quarter down 32.66% YTD gross of fees, trailing the broader market. This is a significant drawdown in isolation, but also not entirely unsurprising to have some weakness after almost a decade of very strong returns. Individual account...
Stocks fell sharply this past Tuesday with the S&P 500 ending the day down 4.32%. But even with that significant fall, the S&P 500 was still slightly up over the previous week. It is safe to say that markets have been volatile in a whipsaw fashion during 2022. As of writing, the S&P 500 is...
Ocado Group PLC (OCDDY) is our worst performing (in price terms) position so far this year. However, even while Ocado’s stock has fallen, our conviction that the underlying business continues to create real shareholder value has only increased. As a result, we recently increased our position at these lower price levels. As a brief reminder,...
Dear Partners, Our performance in the first half of 2022 was disappointing in many respects. The S&P 500 had its worst start to the year in over 50 years. Bonds fared no better, with the 10-year treasury reaching its highest yield since 2011. To put this into context, below is a chart of intra-year peak to...
In our previous article, we made the case for why active management still makes sense in a passive-orientated world. After all, if you want better than average returns, then you must be different from the average, which means taking an active approach. But how do you know which active fund to pick? How can you...
What drives stock prices? At times like this, this question is crucial for investors to understand. The answer is that when you really get down to it, stock prices are really determined by only two things: Fundamentals of a business – Earnings per share, cash flow, return on invested capital, etc. Sentiment – How much the...
Barrons: Why the S&P 500 Is Missing the (Bench)Mark Investors need to understand the hidden risks they are taking by investing passively, given how flawed many indices are. And on top of that, we need to make everyone aware that so much market commentary (even from 'respectable' firms) is plain nonsense. Comparison of index valuation...
There are two important considerations for today’s market environment. One (which we wrote about in our last post) is having the economic strength to take advantage of market volatility rather than being beholden to the capital markets. The second consideration has to do with inflation and pricing power. The best hedge against rising inflation isn’t...
