Author: Bill Smead

Buffett, Jones and Hamm: An Oil Wisdom Trifecta

Someone once said, “Better than being smart is knowing who is!” Over the last few weeks, three of the richest and most successful businessmen in the U.S. have let us know what they think about being in the oil and gas business. Warren Buffett, Jerry Jones and Harold Hamm are instructing us in a special way and we at Smead Capital Management are happy to be instructed. It is a trifecta that any good handicapper couldn’t pass up. […]

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Don’t Cry for the Most Wealthy

Over the last four years, we have argued that the glamour monopoly technology companies have a low multiplier effect in the U.S. economy. At the same time, home ownership and the creation of new homes has historically been a powerful driver of economic activity. With interest rates normalizing and the stock market punishing the prior financial euphoria, how can we invest to succeed in the coming five to ten years? What does the chart below tell us about how much the stock market will impact the economy going forward? […]

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Investing Through Cold Stretches

We are approximately six to twelve months into a bear market in stocks and bonds. This bear market is the natural consequence of the financial euphoria episode which preceded it. How do wise long-term investors handle these cold stretches in the stock market? Why is it worth fighting through these stock market corrections? How should we as investors behave in a process which takes time, courage and patience? […]

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Stock Market Metaverse

Virtual reality is not reality! We have just come through an era where virtual reality controlled stocks and bonds. For this reason, a series of unreal factors drove what we call the stock market metaverse. […]

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Buffett’s Buying Oil Stocks

After listening to the Berkshire Hathaway Annual Meeting on April 30, 2022, we thought it would be appropriate to frame the aggressive buying of Occidental Petroleum (OXY) and Chevron (CVX) in the first quarter of this year. Buffett and Munger bought around $27 billion of shares in these two companies at around $52 per share on Occidental and around $160 per share on Chevron. […]

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Generals Marching Without Soldiers

[…] This leaves investors heavily committed (29.5% of the S&P 500 Index) to a narrow group of stocks dominated by tech darlings even as bombs are dropping on almost all other tech companies as a category. In other words, tech Generals are marching forward, and few troops are following. As history teaches us, the S&P 500 Index returns could well be prepared to produce “stock market failure” in the form of negative ten-year returns. As always, fear stock market failure.

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Energy Desperados

[…] As a firm, we refrain from delving into politics and political debates. However, the climate change fundamentalists have put our body politic into an energy bind, exacerbated by Russia’s attack on Ukraine. They have moved oil from an economic discussion into a political football and are attempting to defy the laws of supply and demand. […]

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Stock Market TAMnation

Totally Addressable Markets (TAM) are at the heart of what Charlie Munger calls the biggest euphoria episode he has ever seen in his career. We believe that the coming stock market failure emanating from the over-pricing of the U.S. stock market is closely tied to TAM. What is a totally addressable market? When is it useful to think about TAM? Answering these questions could tell us a great deal about where to be invested in the common stock market over the next five years. […]

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Molotov Stock Market Cocktail

In our recent media engagements, we have been asked if the Russian invasion of Ukraine is the cause of the carnage in the stock market this year. Many of the investors suffering stock market failure and financial media participants are looking for some comfort from the declines. They’d like to think that their portfolios have been hit by a Molotov cocktail and that the stock market will repair itself like it did when the pandemic crushed stocks two years ago. The facts appear to say the invasion is only a catalyst for what was already going on. […]

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Buffett’s Latest Inevitable

Warren Buffett released his 2021 Berkshire Hathaway Annual Letter on Saturday, February 26, 2022. He seemed to want to talk about almost anything besides the stock market. Corporate income taxes, whole company purchases in Lubbock, Texas (TTI, BNSF), Berkshire Hathaway (BRK) stock buybacks and excitement of throwing the in-person annual meeting in April of 2022 topped the list. […]

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