Author: Smead Capital Management

In the Bible, Jesus arrives to help his friend Lazarus a few days after he had already died. His friends Mary and Martha were very disappointed because they thought all hope was lost. As the story goes, Jesus raised Lazarus from the dead. We bring this up because of a recent blog post at The Wall Street Journal from Wesley Gray of Alpha Architect. He asked the question, “Is Value Investing Dead?”

What should long-duration common stock owners like us do with the news of the horrific flood in Texas, the Category 5 hurricane in the Caribbean, the heightened tensions created by North Korea’s Dictator, Kim Jong-un, and the 8.1 magnitude earthquake in Southern Mexico? What is wise behavior in a more volatile stock market environment created by outside events? More than 30 years in the industry have taught us that outside events come and go, but patience matters. Just look at the similarities with Billy Joel’s 1989 hit “We Didn’t Start the Fire.” The song named 100 major people, political and economic events in the first 40 years of his life. As you can see, it is interesting how the same subjects continue to pop up in the 38 years since the song hit the top of the Billboard charts.

Forbes article of July 1974 profiled John Templeton, and highlighted some of the wisdom he implemented in his investment process. The article touched on his discipline of consistently praying to God “for wisdom and clear thinking” at the start of each directors meeting for the Templeton Growth Fund. John Templeton noted that even with prayer they still “make hundreds of mistakes, but we don’t seem to make as many as others.” In the article, Templeton also advised that the “ninety-nine percent of investors shouldn’t try to get rich too quickly; it’s too risky.” He advised, “Try to get rich slowly.” Sir John Templeton is on nearly every short list showcasing the most successful investors of all time, and certainly held in high esteem among value and contrarian managers like us.