Drew's Views

Insights from the CIO of Albert Bridge Capital

Stock Picking

Which One Are You?

So, if you are in the taxi, what is your first move (and you can’t say “do nothing”). Are you trimming or adding?
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Was Ben Graham a Quant?

The short, and relatively unknown, paper is chock full of wonderful anecdotes and pearls of wisdom, but it was the interview portion that really caught my attention.
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Just How Cheap is Europe vs. the US, and Should it Be?

As it turns out, it isn’t that the people are paying a bigger growth premium for US Growth over European Growth; but instead it is that people are paying a (much) bigger multiple for US Value than for European Value.
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Are American Companies Better than European Ones?

If we again go back and start the clock on January 1, 1980, and stop it thirty years later on December 31, 2009, we see that the S&P 500 generated annual total returns (with dividends) of 11.5%. During that exact same period, guess what the annual returns of the MSCI Europe were? Also 11.5%. This last decade, however, things have gotten out of whack.
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Rumpelstiltskin and Meme Stock Investing

“What sort of sorcery is this?” Is this financial alchemy powering a perpetual motion engine that will result in higher and higher share prices?
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It's All About the Fundies

It wasn’t passive flows that mattered. It wasn’t interest rates that mattered. It wasn’t the multiple that mattered. It wasn’t an ever-expanding infectious narrative that mattered. No analyst on the buy or sell side came remotely close to understand the market opportunity, the share, the profitability. It was about better vision, modelling. and analysis. It was all about the fundies.
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A Memo to Investors

I know, these are weird and trying times. It all makes you wonder what the point of stock-picking is. What is the purpose of kicking the tires, looking under the hood, and doing our jobs?
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Investors? Possibly you!

FATMAN-G. No, that isn’t my rap name, although vaguely appropriate (I mean, the G part of course). That’s our new moniker for the Avengers[1] of the equity capital markets, to which we have now added Tesla. FATMAN-G is Facebook, Amazon, Tesla, Microsoft, Apple, Netflix, and Google.
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Avengers Assemble!

Amazon is, very simply, a tremendous company. Google is also a tremendous company. The same goes for Microsoft, Apple, Netflix, and Facebook. These are the superheroes of capital markets. In these FAMANG stocks, the Avengers have assembled.
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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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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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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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Finance

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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Finance

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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Finance

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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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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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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Debiasing and Alpha

We manage a concentrated portfolio of investment ideas.
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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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Reminiscences of a Stock Operator: The Volkswagen Chronicles, Ten Years Later

In the spring of 2008, things were already wacky at Volkswagen.
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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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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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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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We’re all Value Investors

Imagine two scenarios.
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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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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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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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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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The Voting Machine

It all started for me over 30 years ago.
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