William Smead
Chief Executive Officer
Chief Investment Officer 


 

 
Dear Clients and Prospective Clients: 

Almost two years ago, the Arizona Republic did a feature story on their cover about a talented and successful residential real estate agent located in Paradise Valley, Arizona. He was featured because the Phoenix market had been hot for years and nobody was hotter selling high-end homes than him. Phoenix and its high-end homes were pre-ordained to fall and boy have they fallen.

Pull out yesterday’s Sunday business section of the Seattle Times and you’ll see a feature on shortsellers. It’s the kind of article they write when someone has been on a roll (in this case betting against stocks). Short Sellers have every right to bet against stocks, but the media only wants to write about you when you’ve had a hot hand lately. There were no features on short sellers in the 1990’s, as stock rose dramatically off and on for a decade.

These cover stories come from the media all the time, both nationally and locally. Examples include T. Boone Pickens, Donald Trump and Shawn Alexander (the former Seahawks running back). The media had Boone Pickens all over their covers during the big run up in Oil prices. The price of oil has since been chopped in half and Picken’s Hedge Fund has lost $2 billion.

When real estate was hot, the “Donald” and his smiling face were everywhere. Sell real estate when Donald Trump is popular and buy when he is in bankruptcy court. Former Seahawks running back, Shawn Alexander graced the cover of Sports Illustrated two plus years ago (after being named league MVP). He couldn’t find a team that would hire him at the start of this year. The Seahawks can barely win a football game. The fall from the cover is a hard one.

The media is in love with the Hedge Fund managers and shortsellers who have had the hot hand in the decline of the last few years. We think they and their investors could be singing the blues in two years. Remind me to be cautious down the road when the cover stories are about value buyers like us, who stayed the course around the bottom of the Panic of 2008. We are looking forward to getting to the top of the performance mountain from this difficult valley and believe that it is being set up by the current cover stories.

Best Wishes,


William Smead

We Advise Investors

Sign up to get our advice sent straight to your inbox.

Recent Missives

The Market: Cole Smead, CFA on European Bank Mergers

A Tsunami of Mergers Is Heading for European Banks By Christoph Gisiger For more information go to www.themarket.ch. Stocks mentioned: UNI, BG, BCS, RO, CVE, SCR, IMO, GLEN The information […]

⟶ Keep Reading

Investment Executive: Bill Smead on Magnificent Seven as a Stock Market Bubble

  Is the Magnificent Seven a stock market bubble? By Kevin Press For more information go to investmentexecutive.com. The information contained in this tv appearance represents SCM’s opinions, and should […]

⟶ Keep Reading

2Q26 U.S. Value Strategy Newsletter: Diversification Circa 2026

Most of the studies we've seen argue that 90% of the benefit of diversification comes by the 20th common stock. In our discipline, based on our eight criteria for common stock selection, we...

⟶ Keep Reading

2Q26 International Value Strategy Newsletter: Stampeding Towards the Next Problem

The world we wake up to today seems to have all the information we can dream of, but less discernment than is needed. The Iran conflict was misread with oil prices at $100...

⟶ Keep Reading

The Tsunami of European Bank Mergers

Most global investors are not attuned to what can be seen on the horizon, not far from shore. After the Great Financial Crisis, Europe was slow to address the underlying capital issues. Rather...

⟶ Keep Reading

Reuters: Bill Smead on Occidental’s New CEO and Growth

  Occidental’s new CEO tested by debt, lagging stock price and big dividend payments to Berkshire By Sheila Dang For more information go to reuters.com. The information contained in this […]

⟶ Keep Reading

We Advise Investors

Sign up to get our advice sent straight to your inbox.

US INVESTORS

Individual Investors

OR

Financial Advisors, Family Offices,
and Institutional Investors

OR

NON-US INVESTORS

Individual Investors

OR

Financial Advisors, Family Offices,
and Institutional Investors

OR

Scroll to Top