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US INVESTORS
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Sales Desk – US   877.701.2883
Sales Desk – International   +353 1 525 9677

US INVESTORS
Non-US INVESTORS

Author: Smead Capital Management

1Q13: Downton Abbey Stock Market

Downton Abbey is a Masterpiece Theatre show on PBS which has taken US television viewers by storm. It is the story of an aristocratic family in England which perpetuates a dynasty in a small town through the operation of a huge estate. Devotion to this estate and huge family home are accomplished by employing a small army of servants, who maintain the home and the aristocrats. We believe there are strong parallels between what goes on at Downton and what has been going on in the US stock market since 2009. We also see this as a recurring theme for the next 5 to 7 years.

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April 22, 2013

What’s Your Advantage

In the March 9, 2013 issue of Barron’s, writer Jonathon Laing wrote an excellent piece about Howard Marks. This article provides the base from which we can discuss the main components of investment portfolio composition. These components are information, analysis of information, and decisions made from information and analysis. In doing so, we will bring to light why we believe today’s best opportunity is in long-duration common stock investing.

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March 12, 2013

Reuters: Bill Smead discusses Berkshire Hathaway (3/01/2013)

Buffett: Performance streak may end this year By Ben Berkowitz For more information go to www.reuters.com. The information contained in this article represents SCM’s opinions, and should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results. The

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March 5, 2013

Smooth Returns

Harry Markopolos was working for a hedge fund of funds and attempting to put a portfolio together that would “smooth” long-term returns. In the process of marketing what his company was doing, he ran into a client who already had a money manager doing that for him. The money manager the client used was Bernie Madoff. When Markopolous looked at the long-term track record of Madoff’s client, he instantly knew that it was mathematically impossible to have a return that high with as little year-to-year variance in the return. We at Smead Capital Management would like to ask a few questions. How do you legally “smooth” investment returns? What price do you pay to “smooth” returns? Why do we as long-duration common stock owners not care about “smooth” returns?

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March 5, 2013

Losing the Bid

Many times in my 32-year career people ask me to comment on whether an established trend for a popular investment will stay intact. The most recent example was last year (2012) when our firm was asked on numerous occasions to comment on the stock of Apple. My answer is always the same. We don’t know when the hot streak will end for the popular investment and we don’t feel comfortable with popular securities.

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February 26, 2013

Our Job: Whether; Market’s Job: When

Warren Buffett describes the stock market’s purpose as being “a wonderfully efficient mechanism for transferring wealth from the impatient to the patient”. We are reminded of this by a series of news reports and commentaries on subjects greatly influenced by basic economics. In today’s missive, we consider what the law of supply and demand says about China, oil, and housing in the USA.

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February 12, 2013
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