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3rd Quarter 2020 Letter to Investors

October 18, 2020

As this very unusual year progresses, things have become even more interesting and perplexing. The Fed has poured money into the economy, yet we don’t have massive inflation. The stock market is up, yet most stocks are lagging a few big technology behemoths fueled by speculative money. In short, it is a minefield the likes of which we haven’t seen before. With an election around the corner, things may get even more interesting.

2nd Quarter 2020 Letter to Investors

July 11, 2020

Why is the stock market going up when the economy is clearly in recession? We answer this question and explain why Wall Street seems to be disconnected from main street during the pandemic. We also look at drug companies and conclude that there is little if any money to be made from developing a Covid-19 vaccine. 

1st Quarter 2020 Letter to Investors

April 10, 2020

Corona virus hit with a bang and the stock market reacted. We talk about how we're investing in this situation. Then we take on the question of whether the Fed is embracing MMT (Modern Monetary Theory) and what the outcome of the money printing might be. 

4th Quarter 2019 Letter to Investors

January 16, 2020

Wrapping up 2019, a great year for the stock market, we explore stock valuation and risk factors. We delve into $0 commissions and find out there is no such thing as a free lunch. Last but not least, we explain everything investors need to know about the new IRA rules that became law with the SECURE act. 

3rd Quarter 2019 Letter to Investors

October 11, 2019

Strange things are brewing in the investment markets. This month we talk about the case for negative interest rates and why they might not be so fanciful a notion. We also explore the rise and fall of the tech unicorns and why they are becoming increasingly rare once again. 

2nd Quarter 2019 Letter to Investors

July 17, 2019

It’s been a great year for the markets so far and an excellent quarter for our portfolios as well. We never take our eyes off the risk factors, though. In this letter we share lessons learned from some of the most important decisions investors have to make – saying “no” to an opportunity. We review the lessons from Bad Blood by John Carreyrou and discuss the allure of cryptocurrency and cannabis. 

1st Quarter 2019 Letter to Investors

April 15, 2019

What a difference a quarter can make! We examine volatility and acknowledge it as part of life for an investor. We look at a study that crafted the "Perfect Portfolio" of the stocks that outperformed all others during the past decade. We see the volatility inherent in even the perfect portfolio and agree with the authors that "Even God would get Fired as an Active Investor."  Then we tell investors why they should care about Brexit and its outcome which could shape how world economies respond to populism. 

4th Quarter 2018 Letter to Investors

January 16, 2019

After a stock market rout during the last few months of 2018, we gaze into our crystal ball to find out what is in store for 2019 and beyond. 

3rd Quarter 2018 Letter to Investors

October 12, 2018

Economic uncertainty is the theme of this quarter's letter. We talk about how the trade was is impacting everyday life now that tariffs are starting to bite with a story about the rising price of Fritos at the vending machine. We also re-cap some of our long-time holdings and talk about why we decided to hold or fold on three real-estate firms.

2nd Quarter 2018 Letter to Investors

July 10, 2018

US Tariffs are beginning to bite and we worry that these unwise trade barriers could cause a sell-off in the stock market, as well a serious reduction in economic activity around the globe. We take a look at the fallacy of equating trade imbalance to prosperity and explain why tariffs are not a remedy for a trade deficit. Then we look back over ten years of investing and find that the world has changed substantially. 

1st Quarter 2018 Letter to Investors

April 13, 2018

Has the US forgotten the lessons from Smoot-Hawley? As we threaten tariffs against our trading partners, Midway Capital responds with a trade war FAQ. Then we discuss why Americans can't delete Facebook despite the recent data scandal. 

4th Quarter 2017 Letter to Investors

January 12, 2018

We discuss the merits of various tax reform proposals in light of the new tax legislation coming from Washington, and we offer tips on when to hold and when to fold when it comes to taxable gains.

3rd Quarter 2017 Letter to Investors

October 15, 2017

We take a look at the valuation of bonds vs. stocks and ask what we can learn from the Equifax debacle. This leads to a discussion of how companies can be more friendly to shareholders by holding management accountable for its mistakes.

2nd Quarter 2017 Letter to Investors

July 13, 2017

What will happen to malls and other retail properties given the ongoing shift away from brick-and-mortar stores? We share our gleanings from a few portfolio holdings, and discuss how valuation and patience have a positive impact on returns.

1st Quarter 2017 Letter to Investors

April 09, 2017

We check in on the Trump Trade after the first 100 days. Through the lens of the prisoner’s dilemma, we look at the oil and gas industry as it grapples with low-cost oil and plausible substitutes, and we examine the winners and losers of cheap energy.

4th Quarter 2016 Letter to Investors

January 17, 2017

Trump’s election victory was a paling only in comparison to Wall Street’s reaction to his win. We discuss what financial markets expect from The Donald, and whether the expectations are reasonable. We also share our thoughts on bond investing and central bankers.

3rd Quarter 2016 Letter to Investors

October 11, 2016

What does the future hold for manufacturing in the U.S.? How does campaign rhetoric align with hard data? We discuss robotics, Brexit, and Charlie and the Chocolate Factory.

2nd Quarter 2016 Letter to Investors

July 15, 2016

The investing world is filled with (often contradictory) conventional wisdom. We classify old adages into truths, half-truths, and outright falsehoods.

1st Quarter 2016 Letter to Investors

April 16, 2016

Washington is keeping busy. How did the Department of the Treasury outlaw corporate inversions despite its own assertion that it lacks authority to do so? We explain this, as well as the Labor Department’s Fiduciary Rule.

4th Quarter 2015 Letter to Investors

January 15, 2016

Heading into 2016, we share advice – free, contradictory advice – from The Street’s brightest minds. We also discuss the good and bad of “financial engineering.”

3rd Quarter 2015 Letter to Investors

October 12, 2015

Low oil prices and the ripple effects of the shock may be the story of the decade. China, Saudi Arabia, the United States, Canada, and Iran all operate with competing interests in this complicated machine. This letter considers their objectives, and we explain why we don’t mind stock market swings.

2nd Quarter 2015 Letter to Investors

July 10, 2015

We look at the imploding Greek economy and wonder whether the European Union will take steps to nudge Cradle of Democracy out the door. We also look at the Chinese stock market meltdown and the prospect for rising interest rates in the U.S.

1st Quarter 2015 Letter to Investors

April 17, 2015

American oil producers aren’t just drilling more wells. New technology produces twenty times as much oil as older wells. We share our advice on how to play this “new normal” in the energy sector, and a few items for your summer reading list.

4th Quarter 2014 Letter to Investors

January 15, 2015

In a surprising move, Saudi Arabia didn’t reduce its oil output. The ensuing glut cut the price of oil by more than half. Did the stock market react rationally to this shift?

3rd Quarter 2014 Letter to Investors

October 09, 2014

Low interest rates prompted a borrowing binge, but as rates look set to rise, will borrows be able to justify the rising costs? We also look at the truth behind the four most dangerous words in investing.

2nd Quarter 2014 Letter to Investors

July 15, 2014

We discuss stock picking so far in 2014, which is shaping up to be a “stock-picker’s market.” What exactly does this mean, and why do investors like us cheer this kind of market? We also discuss global taxation and explain why so many American firms are merging with companies located in remote island nations.

1st Quarter 2014 Letter to Investors

April 15, 2014

Why is a notoriously conservative investor pushing emerging market stocks while warning against danger in government bonds? We also discuss the recent surge in IPOs and our general lack of enthusiasm for initial public offerings.

4th Quarter 2013 Letter to Investors

January 15, 2014

The past 12 months gave us the best returns since the 1990s tech boom. We consider whether the recent spike has stretched the market beyond its means as was the case back then, and we discuss some recent areas that have drawn our interest.

3rd Quarter 2013 Letter to Investors

October 15, 2013

The current year makes us want to host a sock-hop and party like it’s 1954. What is driving 2013’s returns, and where can we find bargains? We also call out a shift in the way employers provide health insurance that’s affected one of our holdings.

2nd Quarter 2013 Letter to Investors

July 15, 2013

Ben Bernanke's speeches are notoriously cryptic. What did the Fed Chief say that spooked the market, and did it react rationally? And, we discuss one of our holding’s recent spin off.

1st Quarter 2013 Letter to Investors

April 15, 2013

This year is off to a blazing start. Markets are setting new all-time highs, so does that mean it’s time to quit buying? And while the U.S. stock market has been shooting out the lights out, we pick apart the reasons for two recent fiscal collapses.

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