On March 17, 2020, we published an article titled Market Update: The World is Ending (Again…) in which we discussed the large (at the time) sell off in the market related to the onset of the Covid-19 pandemic. While the title of the article was purposely hyperbolic, the message we conveyed was simple and...
This is our third entry in a multi-part series on some of the common failings of generally accepted accounting principles (GAAP). As a brief reminder, GAAP accounting is what you will find when you open most US publicly reported financial statements. These are the numbers commonly used to assess the financial health of a given...
This is our second entry in a multi-part series on some of the common failings of GAAP (generally accepted accounting principles) when it comes to truly understanding the economics of a business. GAAP accounting is the accounting you will find if you open most US publicly reported financial statements. These are the numbers commonly used...
This will be the first in a series of articles covering a fundamentally important concept in equity investing: that there is a difference between reported accounting numbers and actual economic reality. GAAP (Generally Accepted Accounting Principles) is the accounting you will find if you open most publicly reported financial statements. These are the numbers commonly...
We wrote back in November about the risks posed to Western investors by the Chinese VIE (Variable Interest Entity) structure. Following recent announcements by the Chinese regulator, we believe those risks have just increased, so we thought it best to revisit the issue and provide an update. For those unfamiliar with the VIE structure, please...
Over the past few weeks, you will likely have noticed increased mentions of inflation in the news. The March print for CPI (average price of consumer goods and services) came in rather high: +4.2% year-over-year. This is after many, many years of persistently low inflation. How concerning is this? Despite the markets knee jerk...
Our last article, Indexing, Benchmarking, and the Problems Therein, generated a lot of positive feedback so we have taken the time to deepen the discussion further. As a quick refresher – Benchmarks and the Indices they are derived from are typically used by firms such as ours to provide some element of performance comparison and...
We are often asked about our performance relative to an appropriate “benchmark”. For this reason, we often cite our over/under-performance relative to the S&P 500 (the most widely used benchmark, despite significant drawbacks). But please note, we are indifferent to any benchmark, and by no means manage our portfolio with the S&P 500 in...
Aside from the pandemic and election related news this year, you are probably also aware of a significant wave of private companies going public in the market to great fanfare and even greater one day share price appreciation. Some notable examples this year have been: Snowflake, Unity Software, DoorDash, Airbnb… just to name a few....
Over the past decade, a new sub-industry has developed within the investment community. It operates under a number of names, the broadest of which is Responsible Investing, which incorporates concepts such as ESG (Environmental, Social, and Governance), and SRI (Socially Responsible Investing). At its core, Responsible Investing requires that investors acknowledge a number of issues...
