Commentary

Occidental Petroleum’s Wirth

On April 12, 2019, Chevron (CVX) and its CEO, Mike Wirth, offered $33 billion dollars to buy the common shares of Anadarko Petroleum.

Commentary

Outlook 2022: Polar Opposites

There are three pillars of investing for us at Smead Capital Management.

Commentary

A Dr. Lecter Market

The beginning to 2022 has been dark to say the least.

Commentary

True Religion in Value

Most professionals who employ our strategy are wide-asset allocators

Commentary

Lessons From the King of Capital

We have been reading a book written by David Carey and John Morris called King of Capital. It is the story of the Blackstone company and its key founder, Stephen Schwarzman. An economic history from the 1980s through today is included and lays out some excellent reminders of certain disciplines which can create wealth in picking public companies to invest in.

Commentary

No Doubt Investors

In the depths of the lockdowns in March and April, we were together at home, day after day. The U.S. Federal Reserve Board pumped large amounts of liquidity in our economic system. The U.S. Federal Government followed by providing large amounts of fiscal stimulus in PPP loans...

Commentary

Pulling The Punch Bowl

Overall common stock index performance can be a very confusing thing to most investors. From a cyclical standpoint, the history of stock price performance in the U.S. is closely associated with the Federal Reserve Board. When the Federal Reserve Board reverses an accommodative interest rate policy, it is affectionately referred to as “pulling the punch bowl.”

Commentary

Aesop’s Marathon

Warren Buffett and Charlie Munger always refer to Aesop as the originator of investment logic. His first dictum was “a bird in the hand is worth two in the bush.” His second dictum was the fable of the “Tortoise and the Hare.”

Commentary

Energy Bandwagon and Bankers

In 2014, famed UK stock picker Terry Smith wrote a piece, titled Shale: Miracle, Revolution or Bandwagon?, in most ways mocking investors excitement in the oil and gas business in the United States of America.

Commentary

Blithe Stock Market Spirits

At Smead Capital Management, we practice our discipline of picking and owning stocks which meet our eight criteria in both favorable and unfavorable environments. The current “blithe spirits” were brought to mind in a movie of the same name.

Commentary

Bond Market Education

During our quarterly webcast last week (October 21, 2021), someone asked us a great question. They asked, “Does the ten-year Treasury bond rate at 1.65% and an inflation rate of 5% teach us that inflation will be transitory?” It is an important question because the majority of economists and market strategists are betting that inflation is transitory.

Commentary

The Gestalt of the 2020’s

Today’s atmosphere is one that we rarely see as investors. This is not like junk bonds in the 1980’s or the run up in Valeant Pharmaceuticals and the other generic drug companies in the 2010’s. There is not a narrow way of looking at today. It is broad.

Commentary

Zuckerberg’s Choice

We have entered the phase when the body politic and public opinion are aware that Facebook is disturbing our society. This is very important to us as investors, because the big tech companies make up a disproportionately large part of the S&P 500 Index.

Commentary

Inflation is a Wolverine

The media and the economics profession are treating inflation like it is a friendly puppy dog. They think you can take it out of its pen and play with it for a while. The popular theory is that you bring it out in a severe dip in economic activity and when the economy gets back on its feet, you kindly ask inflation to crawl back into its pen like any good puppy dog would do.

Commentary

Incentives Pivot from Greed to Fear

The talk of inflation today looks much like housing did in 2007. Evidence is mounting everywhere that this is a real long-term problem that is only getting worse. You can read this in the media, but yet security prices don’t reflect how damaging this may be.