The Case for Optimism

Recently The Wall Street Journal published an exceptional commentary by French free-market journalist Guy Sorman titled “The Case for Optimism,” which is reproduced below. “Are we better off than our generational predecessors?  Some say no, but I’m old enough for such pessimism to seem absurd.  My parents knew nothing of modern conveniences like central heating, … Continued

Punitive Damages and Investors

Punitive damages can be defined as a court awarded sum that is considerably or greatly higher than the measurable value of the injury.  Punitive damages are meant, not to compensate the aggrieved party, but to punish the offending party for its allegedly reckless or unconscionable actions or conduct. Without attempting to resolve the differing views … Continued

Pension Fund Investing

A recent article in The Wall Street Journal suggested that corporate pension funds and university endowments have missed out on much of the rally for stocks since 2009, instead following a push to diversify into other investments.  Candidly, these other investments have had disappointing performances. While there is a case to be made for greater … Continued

Investment Trend in the US Auto Market

Phil LeBeau, from CNBC, recently published an article highlighting trends in car buying.  One of the statistics mentioned in the article stood out to us.  That is, nearly 25% of new auto loans have payment terms between six and seven years.  Currently, auto loan terms have been extended to record highs due to increased vehicle … Continued

Management Compensation

There has been an increase in media coverage of, what many view as excessive, compensation packages for CEOs and senior management, highlighted by the recent media attention given to Coca Cola’s proposed compensation plan, some investor objections and Berkshire Hathaway’s somewhat mystifying responses.  Clearly, this is a matter for investor consideration, but is not always … Continued

Alarmists, Deniers and Investors

The Wall Street Journal recently carried James Huffman’s review of Patrick Allitt’s new book, “A Climate of Crisis”.  Mr. Huffman’s opening paragraph is a concise summary of the dilemma facing investors. “Climate change has been the dominant environmental concern of the 21st century.  Public discussion of the topic is less an informed exchange of ideas … Continued

Selling books can be a tough business.

Michael Lewis is famous for his books about the financial industry such as Liar’s Poker and The Big Short as well beautifully written stories like The Blind Side and Moneyball. He is an engaging person who has proven time and again he has great insights into human nature and the world of finance. This time … Continued


I was stunned last week by this event. Not the event itself but rather coverage of it. To help me keep abreast of market activity during the day I keep CNBC on in my office (albeit on mute after nine am). However, I was driving in my car listening to CNBC when the outage was … Continued

Other People’s Money

There seems to be an increase in the cavalier treatment of other people’s money (OPM) by a wide variety of individuals and organizations, including corporate executives, politicians and some investment advisors. One would think that corporate executives could remember that every dollar they spend actually belongs to the shareholders. Politicians need to remember that all … Continued

Detroit was an Investment Too Good to Be True

Our investment committee found a recent WSJ article regarding the impact of Detroit’s bankruptcy on a number of European banks quite interesting. The article gave some detail surrounding Detroit bonds structured by UBS and sold to a number of European banks in 2005. At the time, Detroit was struggling to fund its pension obligations and … Continued

Does Management Matter?

Approximately one year ago, Yahoo hired Marissa Mayer to lead the company after a series of failed efforts to improve operating results. During the last 12 months shareholder value has nearly doubled, increasing by approximately $15 billion. In September 2006, Ford hired Alan Mulally to lead the company at a time when the Detroit based … Continued

Dow Will Hit 60,000 in 20 Years: Ron Baron

A dramatic statement but actually, a relatively modest forecast. With the Dow currently at approximately 15000, a quadrupling in 20 years would require a compound average annual return of approximately 7%. Annualized total returns for the major averages, such as the S&P 500, Dow Jones Industrial Average, S&P Mid-Cap and Russell 2000 Small-Cap, have ranged … Continued