Drew's Views

Insights from the CIO of Albert Bridge Capital
All Posts

Was “Value” Just a Hot Hand Thing?

In 1861, at the outset of the Civil War in the United States, Union Pacific issued 20 shares in its IPO.

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The Hot-Hand Fallacy Fallacy Fallacy?

Many of you will be familiar with the so-called “hot-hand” fallacy, or (perhaps) the lack thereof.

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Cue the Camouflage

The S&P 500 is up 6.5% this year. That’s a total return number, and given what is going on out there, it’s pretty impressive.

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The Times that Try Stock-Pickers’ Souls

On first principles, there is one way to generate excess stock market returns over the long term, and it isn’t to “own winners at any price.”

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A Different Game?

I was out shooting baskets this weekend, thinking about the concept of inversion.

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Heads I Win

A few months back I had a big battle with one of my oldest, most intelligent friends.

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A New Ice Age?

I’ll spend $3 at the 7-11 for a bag of ice, and drop it in a cooler. I really like ice.

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Grandpa Stocks

There are young companies out there that are exciting, growing quickly, and very clearly have the world in front of them.

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Bubblicious?

COVID-19 and related counteractive policies have had an extremely negative impact on domestic and global economies. Whether or not you believe that the policies weren’t strong enough, or if they were overzealous, we are where we are.

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On Negative Oil and Futures Prices

“Whoever controls oil controls much more than oil” said John McCain in 2008. And he was right.

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In Flew Enza

World War I began in 1914, and the US declared they would join the fight in April of 1917.

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COVID-19 and Equity Markets

My wife’s family is from Tuscany, and Italian is her first language. Four years ago, she wanted to get out of London for the summer, and headed over to Italy with the kids. But instead of visiting her cousins, aunts, and uncles in Florence, she chose instead to spend 40 days in Venice.

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Regulators to the Rescue?

Market authorities across many European countries have announced plans to prohibit short-selling (to varying degrees) for the foreseeable future.

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Perspective

I started an investment club in college with $100. I had seven buddies that also saved $100, so we had $800 all-in.

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We Don’t Make Pizzas

Here at the Albert Bridge Restaurant, the investment team has the chefs, the IR team has the waiters, and the operations team ensures that the shop runs smoothly so that we can keep on serving up alpha (hopefully) to you, our customers.

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Ben Graham the Growth Investor?

We’re all for debunking myths, and given the performance of growth stocks recently, we’re making a pre-emptive strike in defense of the father of value investing.

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Not a Bad Decade

Closing the book on a decade of equity returns.

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On the Impact of the FAMANGs

Market headlines, globally, have been dominated by the storied performance of a select few transformational, winner-take-all business models.

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Europe vs the US: Is it all about sector exposures?

In America’s Decade, we highlighted the very similar returns provided by the MSCI Europe and S&P 500 from 1980 through 2009, and the very different returns since.

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Behavioural Finance is Finance

Last week, Barry Ritholtz had a fun interview with Eugene Fama.

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America’s Decade

When it comes to predicting the economy, we believe that speculating when things will turn is an exercise in futility and a horrible waste of time; one which meanwhile distracts us all from the task at hand.

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Known Unknowns and Share Prices

In February of 2002, Donald Rumsfeld famously introduced known knowns, known unknowns, and unknown unknowns into the lexicon.

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Prediction, Publicity, and Paul the Octopus

Unlike many other market observers, we just don’t see the point in discussing or debating the macroeconomics driving overall markets, volatility, or sentiment.

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Are Company Visits Good or Bad?

Our most profitable investment, ever, was probably the combined result of a lotta luck, some skill, and hard work.

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Everybody Was Kung Fu Fighting?

Last week, Finance Twitter erupted over a Bloomberg article about Michael Burry [i] and how he likened passive investment in equity markets to the bubble in the synthetic CDO market back in 2007, which he famously – thanks to Michael Lewis and Christian Bale – identified.

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Voting Machines and Weighing Machines

Ben Graham is famously attributed for stating that the market was a voting machine in the short term, but a weighing machine in the long term.

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The DCF is the Randy Watson of Valuation

I’m not very well-rounded. I studied finance in college, and finance in business school.

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The Sacrilegious Diaries: Measuring the Impact of Portfolio Turnover

A few weeks ago, we discussed the potential benefits of portfolio and name turnover.

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Passively Irrational?

Some of you may remember the quant crash of August 2007.

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Imagine No Inflation

Many folks have now listened to this fascinating interview of the pseudonymous Jesse Livermore by Patrick O’Shaughnessy.

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The Sacrilegious Diaries: The Benefits of Turnover

For a fundamental, value-oriented investor, we are reasonably active in the management of our portfolio names.

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Stay in the Game

This is going to be an uncharacteristic departure for me. This story is deeply personal, for our family, and for our oldest son in particular.

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I’m Volatility?

Is risk “volatility vs. a benchmark” or is risk “the potential permanent loss of capital”?

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Woody was Right

If you are managing a portfolio of equity investments, whether personally or institutionally, there are many factors that (should) go into its construction.

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When You Can’t Wait For Tomorrow

We’re mulling this morning over what it is that makes stock prices, and stock-picking, work.

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James Harden and Alpha

I played high school basketball in Indiana. I won a few honors, but was broadly mediocre, and certainly not NCAA D1 material.

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Groundhog Day and Overnight Returns

Over the past few years, some of the finance literature has started addressing the phenomenon, if not the apparent puzzle, of overnight returns (close-to-open) vs. intraday returns (open-to-close).

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Debiasing and Alpha

We manage a concentrated portfolio of investment ideas.

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Peak “Peak Car” ?

Disruption in the auto industry is a very hot topic.

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The Right Way

We wanted to quickly highlight that the difference between the fee structure of a large, diversified, purportedly active fund and a smaller, concentrated, active fund.

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The First Step to Regaining Credibility

As equity indices romped higher throughout most of the last ten years, the long-short hedge fund industry increasingly came under attack.

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The Futility of Market Timing

We are not big fans of market timing. Those that profess to have such a skill before the fact often always turn out not to have had much skill in hindsight.

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Visualizing the Arithmetic of Active Management

It’s been said that a picture can be worth a thousand words.

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Sweet Emotion?

No matter what we pretend to ourselves, even for those of us with more than ten years of investing experience, this move is painful.

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Share Buybacks, Bad Companies, and Bear Markets

The star has fallen for a few companies out there, and for those that had previous share buyback programs, there have been some of the predictable “see I told you so” articles written about them.

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Risk and Portfolio Theory

As we’ve discussed, efficient market academia suggests that Mr. Market actually only cares about systematic risk.

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Keeping Calm and Carrying On

October unleashed a storm upon financial markets.

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We’d Rather Not Sleep

There is a tilt in our portfolio toward value stories where we think the consensus investor is biased against processing improving fundamentals.

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Factor Timing, Should You Try?

These are our two cents on whether you, or we, or anyone else can pick the perfect time.

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The Mathematics of Maintaining Bet Size

We aren’t big fans of dipping our toes in the water when entering a position, nor of timidly reducing when exiting.

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The Grandfather of Behavioural Investing

Benjamin Graham is considered by many as a founding father of value investing.

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On Sexual Chocolate and Semi-Annual Reporting

The presupposition that quarterly earnings and guidance somehow breeds short-termism and suboptimal business strategy,

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Island Economies and Risk

In this economy there are two companies, a resort hotel, and an umbrella manufacturer.

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Build a Bear?

Imagine every adult has 10% of their savings invested in “the global stock market”,

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Data Science and Alpha

As the investment community embraces data science, we should not be blind to the reality that many of our active-management peers are

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Hunting for Alpha

But Can a Stock-Picker Really Generate Alpha, and is it Luck or Skill When it Happens?

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Career Risk, Alpha, and Contrarian Investing

At our firm, one of our main goals is, very simply, to generate excess returns from equity investing without taking commensurate risks.

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Passive Flows and Wheelbarrows

A nightly sort of the most active US names is usually dominated by ETFs. Earlier this month, we took a peek at the most heavily traded names on one particular day.

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God Bless the Shorts

Elon Musk made a lot of news last week, refusing to answer “boneheaded” questions from “boring” sell-side analysts.

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Sell in May, and Go Away?

We’re not inclined to automatically buy in to perceived wisdom, and you probably aren’t either;

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Equilibrium Happens

There is a great deal of discussion these days regarding the impact of passive investing

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Horses and Stocks

Bet With The Best, Chapter 3: Crist on Value

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Peak Quality?

Mr. Market has been increasingly attracted to and enamoured by the concept of “quality” investing. So, let’s explore it.

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Bill Sharpe and Hank Aaron

We basically need to hold something different (either securities or bet sizes) than the “market”.

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Unwarrented

Evidently, the closest thing we in financial markets have to Albert Einstein or Winston Churchill, is Warren Buffett.

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The Search for Excellence and the Loser’s Game

We’re on a continual search for the very best ideas for our concentrated portfolio.

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Fooled by Non-Randomness

Students of decision-making and bias will all have seen the work by Cornell psychologist Tom Gilovich,

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Half Hearted Is Half Minded

After discovering the next great investment idea, why is it so easy to start with a half-sized position, watch it a bit, and then go full-sized later?

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122 year Dow Jones Histogram: Putting 2017 into context

2017 was a pretty good year for the stock market. The 19th best since the Dow Jones Average was introduced in 1896.

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Pegs, P/E'S and the Value Premium

Several years ago, we did an analysis of companies starting with a specific starting growth rate, and assumed that they would do a straight-line ten-year fade to a growth rate equalling inflation.

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Rick Barry and Lewis Carroll

The goal of our business, very simply, is to generate excess returns for our investors without taking commensurate risks.

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Secular Winners and Value Investing

There are very few growth investors that stayed in business long enough to become a household name in the investment community, and even less of them that ended up writing books about their lifetime experiences.

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Robots and Alpha

The trend from active to passive (or systematic) investing is now well-entrenched.

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The Voting Machine

It all started for me over 30 years ago.

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