Investing Strategies Archives - Page 2 of 7

Aug272015

Let’s Talk About Investing in Oil Stocks and the Oil Majors

Portfolio Management, Stock Market, Stocks, Value InvestingBy Joshua Kennon August 27, 2015 53 Comments

I’ve received a significant number of requests over the past few months asking that I discuss what is happening with oil, natural gas, pipeline, and refining companies; to explain how I look at the situation and the sorts of things Aaron and I discuss when we’re allocating our own capital or the capital of those who have entrusted their assets to us. It’s a big topic with a lot of niche considerations but I want to take some time today to address the oil majors; the handful of mega-capitalization behemoths such as ExxonMobil, Chevron, Royal Dutch Shell, Total, ConocoPhillips / Phillips 66, and BP.

Jun192015

Nasdaq Surpassed Dot Com High 15 Years Later

After 15 Years, the NASDAQ Surpasses Its Dot-Com High

Index Funds, Stock MarketBy Joshua Kennon June 19, 2015 37 Comments

On August 9th, 1995, the company behind Internet browser Netscape went public, skyrocketing as people fought to get a piece of the so-called “new economy”. It set off a buying panic among the public that lasted five years; otherwise rational men and women convinced that this time really was different, the mania feeding on itself. Anything and…

Mar202015

The Mathematics of Diversification and Wealth Building

DiversificationBy Joshua Kennon March 20, 2015 64 Comments

I would argue, strongly, that an abundance of evidence shows the typical investors grossly misunderstand the mathematics of diversification and the role it can play in a well-constructed portfolio. Allow me to walk you through some examples that might provide further insight to how you should be thinking about the concept.

Mar62015

The S&P 500’s Dirty Little Secret

Exchange Traded Funds ETFs, Index FundsBy Joshua Kennon March 6, 2015 55 Comments

Over the past couple of decades, quiet, subtle, barely-noticed changes in the methodology of the S&P 500 have resulted in the index barely resembling the one that produced the historical returns investors now seem to implicitly assume they will earn in the future.

Feb262015

The Earliest Known Clip of Warren Buffett Unearthed

Value InvestingBy Joshua Kennon February 26, 2015 23 Comments

It is absolutely nuts to me to see this clip of Warren Buffett that was discovered. In it, he was just shy of 32 years old, roughly the same age I am now. He was completely unknown outside a tiny circle of people, though rich, wasn’t one of the richest men in the country (let alone…

Dec62014

Investing in The Hershey Company Has Made Generations of Investors Rich

Case Studies & Profiles, Stocks, Value InvestingBy Joshua Kennon December 6, 2014 9 Comments

As we approach the end of 2014, I’m looking back on the year. One of the major changes from an investing perspective what a modification Aaron and I made in the investment policy manual. That doesn’t happen often. We added a handful of companies to the list of permanent business; those companies we consider so…

Dec52014

I’m Building a Ghost Ship Portfolio for Someone; A Sort of Index Fund on Steroids

Portfolio ManagementBy Joshua Kennon December 5, 2014 9 Comments

I’m putting together a retirement portfolio for several people I know. One of them is proving to be a fun intellectual exercise. Essentially, the mandate calls for me creating a ghost ship of a portfolio that, once it has set sail, will drift almost untouched for the next 30+ years when it will be gifted to the children at the end of the life expectancy of the owner. Beginning in 7 to 10 years, the owner will start taking 3% to 4% distributions to augment an otherwise secure retirement. The portfolio is to be allocated 70% to a collection of 70 to 100 blue chip stocks, 25% to high-grade bonds, and 5% to cash or cash equivalents.

Jul172014

Economic Reality Is Not Always Reflected on Your Account Statements

Economic Reality Isn’t Always Reflected on Your Account Statements

Portfolio ManagementBy Joshua Kennon July 17, 2014 16 Comments

It is a common mistake for inexperienced investors to look at the realized or unrealized gains or losses reported by their broker, using it as a proxy for economic reality. Total return, particularly on an after-tax basis, can be wildly different. Here is one real-world illustration of how the difference may arise.

May42014

Famed Value Investor Christopher Browne’s Estate Becomes Most Expensive Home In American History At $145,000,000

In the News, Real Estate, Value InvestingBy Joshua Kennon May 4, 2014 12 Comments

One of the most famous value investors of the past 100 years was a man named Christopher H. Browne. His father started a small firm, Tweedy, Browne & Company, that was Benjamin Graham’s stockbroker. It was through Tweedy Browne that Warren Buffett bought his personal shares of Berkshire Hathaway, taking control of the textile mill he would…

Apr42014

What AIG Can Teach Investors About Diversification

Diversification, Portfolio ManagementBy Joshua Kennon April 4, 2014 12 Comments

Imagine that back in 2007, you had $3,000,000 to invest on behalf of a private family investment partnership you were running. You decide to split this into three different companies. One of these was AIG, the insurance conglomerate. AIG shares fell from a high of $1,459.00 each to $6.60. The Board of Directors had to do a 20-1 reverse stock split to keep the thing from trading for less than the value of bottle caps.