Smead Blog

The investment marketplace suffers from information overload. Smead Capital Management seeks to cut through the cacophony of other media resources to focus on what is important to long-term common stock ownership. This comes through our missives, quarterly newsletters and appearances in the media to provide thought leadership for our potential and current investors.

Throwing Caution

As we begin 2021, the investing public is tied up in a “frenzy,” to quote Charlie Munger from a recent interview. This “frenzy” can be captured a couple ways. Whether by the investment banking activities that usually coincide with poor market returns going forward (stock market failure), or by the sell-side research analysts playing hopscotch to raise their price targets over their competition in the most exciting stocks. Rather than look at Wall Street, who can often exact nefarious schemes and ideas on investors, we think it would be best to look at market participants to understand where we sit.

01/12/21 by

From the Impatient to the Patient

As we enter 2021, it appears that Buffett had things upside down in 2020. The things which had gone up the most by the end of 2019, went up the most in 2020. We invest on behalf of clients who want to avoid stock market failure and history shows most investors are impatient and are like a car stalled on the railroad tracks. […]

01/05/21 by

Famed Climatologist Charlie Munger

We were fortunate to watch a recent interview Charlie Munger did with Caltech as a distinguished alum. We consider him to be one of the most successful contrarian investment thinkers on the planet. At 96 years of age, he has no fear of being politically incorrect. We contrast this with the mountain of writing, media and rhetoric associated with the topic of climate change.

12/22/20 by

Net Present Value Bargains

[…] The publicly-traded home builders, whose market share and moat grow by the minute, make up only a scant 0.23% of the S&P 500. At Smead Capital Management, we are practicing what Warren Buffett describes as the Mae West Theory, “too much of a good thing can be wonderful.” We currently own around 14% of our portfolio in home builders. As they prosper the next ten years and interest rates rise as a result of Millennial household formation, this could be one of the few industry groups which won’t suffer from valuation contraction. […]

12/08/20 by

Reminiscences of an eBay Operator

[…] Heed this advice for the current stock market activities: Fear stock market failure! Wall Street is pumping out IPOs, SPACs and all kinds of neat, shiny ornaments. They are selling what is in season. To name a few of these themes: WFH (work from home), TAM (total addressable market), food delivery, eGaming, remote learning and technology dependence. These are wonderful slogans for selling ornaments to willing buyers. […]

12/01/20 by