There Was Shrinkage

Gold and the precious metal miners have been rising consistently over the past three months (GLD +9%, GDX +17%). This has been a very interesting move, especially considering recent government reports suggest inflation remains in check (most recent core CPI 2.2% and core PCE 1.9%). Furthermore, the dollar has [...]

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The Bottom-Up Economist Q4 2018

In my December post, “Are All Bets Off?”, I wrote, “To what extent has the decline in equity markets influenced economic activity and corporate profits?” To answer this question, I noted I needed more information from the frontlines of business. Fortunately, that’s exactly what we received during Q4’s earnings [...]

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The Quality Conundrum

Last week I spent some more time screening through possible buy ideas. A sector that has been roughed up caught my attention – the asset managers. Given my view on equity valuations, combined with the fact that most asset managers are relative return investors, I believe the industry could [...]

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Goose Eggs – Small Cap Value

When I recommended returning capital in 2016, I felt small cap stocks were broadly overvalued. The cash in the portfolio I was managing was rising to record highs and I was unable to find investments I felt would adequately compensate clients for risk assumed. Hence, I felt the best [...]

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I’ve Been High

I’m not sure what surprises me more. The fact that I’ve been writing a blog for over two years or that I haven’t fit America’s best rock band (according to Rolling Stone) into one of my posts. Of course I’m talking about R.E.M. Q3 hedge fund letters, conference, scoops etc I [...]

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The Four Gross Margin Horsemen

As Q3 2018 earnings season comes to a close, there are several important themes and trends I’m looking forward to discussing in our upcoming The Bottom-Up Economist (BUE) quarterly report. While there were many similarities between Q3 and Q2 2018, there were some subtle, but important shifts in trends. [...]

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Capital Guilt Management

It’s that time of the year again. Of course I’m talking about tax loss selling season. Q3 hedge fund letters, conference, scoops etc pasja1000 / Pixabay As a fund manager, I attempted to avoid allowing capital gains or losses interfere with my investment decision making process. For example, if I incurred an [...]

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Tick Tock Where Does The 2-Year Stop?

It’s been an interesting two weeks of macro inflation headlines. On September 7, the Bureau of Labor Statistics (BLS) reported average hourly earnings increased 2.9%, or the largest year over year increase since 2009. Meanwhile, the Fed’s Beige Book was released last week, highlighting the difficulty companies are having [...]

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Would You Rather With Warren Buffett

While working as a fund manager, I often watched Bloomberg TV at night to see where the futures were trading and if I missed any news after leaving the office. Out of habit and curiosity, I continue this routine today. On a recent and relatively uneventful evening, a portfolio [...]

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Hurts So Good

Near the later stages of a market cycle, if I don’t feel stupid and my portfolio doesn’t hurt, I’m probably not positioned appropriately. With short-term interest rates rising considerably over the past year, my patient positioning is beginning to feel a little too comfortable. At this stage of the [...]

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Cyclically Non-Adjusted Earnings

Last week I played tennis with a mortgage broker I’ve known for over twenty years. In addition to being a good friend and tennis player, he often provides me with a timely and accurate assessment of the Florida housing market. Since we hadn’t talked in several months, I was [...]

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Growth, Value, And Spite

It’s been two years since I recommended returning capital and interrupted my eighteen year track record. Although it was a difficult decision, in hindsight it appears to have been the right course of action. Since 2016, valuations have become even more expensive, making it challenging to find a sufficient [...]

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Free College $$$ And Rising Average Prices

While driving to the office (Starbucks) last week, I noticed a McDonald’s sign advertising their new tuition assistance program. I thought it was interesting so I took a picture. Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid? 3dman_eu / Pixabay Yesterday I noticed the [...]

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Participation Trophies

Whoever said “You throw like a girl!” has obviously never been to a fastpitch softball game. I’ve attended many and have seen ten-year-old girls throw 50 mph fastballs from a close distance. It’s very impressive and very challenging for those at the plate. My daughter is one of the [...]

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