Author: Smead Capital Management

A tremendous amount of energy and effort has been expended in the US on behalf of wealthy investors to secure returns while reducing risk. Like any useful endeavor, it started out as a wise thing and reached its stride in the late 1990’s as a way to deal with a massive asset misallocation. As Warren Buffett always says, “What the wise man does at the beginning, the fool does at the end”. It appears to us that the efforts to eliminate risk in the US capital markets have reach the “foolish” point.

As we approach the end of 2012, those of us at Smead Capital Management are struck by how helpful the band, The Who, could be to those who are interested in relative performance. Their comments on demographics, psychology and relative value are as beneficial to the contrarian investor today as they were 40 years ago when their songs were first popularized.

William Smead Chief Executive Officer Chief Investment Officer Dear Fellow Investors: How did the job of an asset allocator move from seeking out undervalued asset classes and securities to one of seeking to mitigate risk? Is risk mitigation a worthy goal or even possible without