Drew's Views

Some year-end charts and tables asking some big questions about what comes next.

I’d like to think that prices can get out of whack for some period of time, and in that window, the nimble, unbiased, fundamental stock picker can take advantage of overreactions and underreactions. If they don't, then the M&M propositions truly hold, and I don’t have a meaningful job. However, if this paper is right, and it is only flows that matter, then while the M&M theorems are overturned, I don't have a meaningful job either. If it is all about flows, then I shouldn't play the game.

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.

“What sort of sorcery is this?” Is this financial alchemy powering a perpetual motion engine that will result in higher and higher share prices?

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.

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?

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

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.”

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

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

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.

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

October unleashed a storm upon financial markets.

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

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

Imagine two scenarios.

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

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

I have immense respect for Bob Shiller.

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.

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.