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.

Humility Produces Alpha

Joe Kennedy was getting his shoes shined in 1929 and the shoeshine boy was giving him stock tips. Think of how humiliating it might have been to Kennedy, who had dramatically reduced his common stock ownership. This upstart had been making money and couldn’t wait to pass along his wisdom to Mr. Kennedy. Joe quickly surmised that there was nobody left to buy stocks and established a huge short position in the stock market. The fortune he made by betting against stocks was part of the wealth which led his son, John F. Kennedy, to become President of the United States in 1960.

10/27/20 by

Energy in the Icahn-ic Green Room

[…]The opportunity in today’s market looks stark, just like the 1970’s did to David Dreman. The battle lines are drawn between the green wing and red wing investors, how they attained their wealth and the weight of it. The real question is what you do with this. Despite the odds that history would argue in favor of what we’ve laid out in this piece, there is an intense urge by investors to go to the most exciting part of the casino. […]

10/20/20 by

Antitrust: The Truth Will Set You Free

Anyone who owns U.S. large cap stocks must understand what can happen from the actions of the government to enforce the laws on the books for antitrust. Contrary to popular opinion, these laws are not set up to primarily protect consumers from being gouged on price by someone with a monopoly. They are, in the words of Congressman John Sherman, designed to stop our nation from “social disturbance” arising from the “concentration of capital in the hands of vast combinations.” In other words, it was designed to limit the power of for-profit companies to receive a disproportionately large share of the success in our society.

10/13/20 by

Smead’s Folly Becomes Newsom’s Folly

[…] The Governor of California, Gavin Newsom, announced on September 23, 2020 that beginning in 2035 no new internal combustion automobiles can be sold in his state. Currently, 5.3% of California cars on the road are electric/hybrid. California is probably one of the most successful states in the adoption of non-combustion engines. Is Newsom making the same kind of folly we made in 2011 (early/wrong)? Is he piling on the negative narrative for energy at an important psychological juncture? Does this trigger a series of questions about the likelihood of attaining his goals and the duration of the usefulness of the oil and gas in the ground in late 2020 in the U.S.? […]

09/29/20 by

Company-Specific Macroeconomic Multipliers

[…] The great irony of the current situation is that most of the economic power and most of the financial resources associated with political power are in the hands of Apple and the other huge tech companies (Amazon, Google, Facebook, Microsoft, etc.). In other words, the success in our society is going to the fewest number of people that have the least possibility of spreading their success to the folks around them. […]

09/22/20 by