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Sales Desk – US   877.701.2883
Sales Desk – UK   +44 (0)20.8819.6490
US INVESTORS
Non-US INVESTORS

Tag: Commodities

Competing with the Alpha and the Omega

In the Bible, Jesus said, “I am the Alpha and the Omega, the first and the last, the beginning and the end.” While Jesus infers that he is at both the beginning and the end of time, we as investors can only operate in the present with a knowledge of what has come before. To better understand today’s commodity market circumstances, we believe investors should examine the herd mentality and the psychological backing that may lead to contrarian investment opportunities.

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September 8, 2015

Where Did The New Middle Class Citizens Go?

The “well known fact” with regards to oil over the last decade read like this: because of huge GDP growth in emerging markets like China, there were going to be 400 million new middle class citizens born of uninterrupted prosperity; they were going to want all the autos, consumer goods, $10,000 watches and food that Americans have. The demand for commodities was going to be endless because capitalism practiced under authoritarian control was going to be better than the “invisible hand” of the free market. No recessions or depressions required.

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December 16, 2014

The Death Knell of the Global Synchronized Trade

At Smead Capital Management, we believe the interest on September 18th in emerging markets, oil and gold are the last gasps of a dying trend. Our discipline demands that you must avoid popular investments and completely avoid investments attached to a perceived “new era.” We argue that the international investment markets reaction to Bernanke’s reprieve on September 18th is proof of a vision we have of the future. We believe that the easy money policies practiced by the Fed have both laid the groundwork for the US to rebound and have simultaneously allowed a dramatically over-cooked trend to continue long after it should have ended. We believe that our easy money in the US has allowed the day of reckoning for the “global synchronized trade” to be pushed back in the same way that the Y2k rollover date elongated the tech bubble in 1999-2000.

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October 1, 2013

Yen Weakness: Buffett’s “Shot Heard Round the World”

We returned recently from the Berkshire Hathaway Annual Shareholder Conference. The most exciting and profound comment to us was what Warren Buffett said about the unprecedented actions the last three years by the Federal Reserve Board. Buffett was asked about the risks of the Federal Reserve’s current plan to buy Treasuries to keep interest rates very low. Buffett said he has faith in Federal Reserve Board Chairman Ben Bernanke, but did acknowledge that it will be a “shot heard round the world” as soon as it looks like the Fed’s Treasury buying plan winds down. At Smead Capital Management, we have been thinking for over one year about the ramifications of the open market setting short-term interest rates and the Federal Reserve Board beginning to reverse their “quantitative easing”. We looked closely at the winners and losers from the current policy and it brought us to today’s key question. What if Yen weakness/Dollar strength is already the “shot heard around the world” and most market participants are missing this fact?

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May 13, 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

Oil: Does Supply and Demand Matter?

William Smead Chief Executive Officer Chief Investment Officer Dear Fellow Investors: If you are a long-time follower of our writing at Smead Capital Management (SCM), you are aware of our belief that a titanic shift is in process in the world economy. The fastest growing

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August 14, 2012

Bloomberg TV: CIO Bill Smead talks about China (5/2/2012)

The information contained in this tv appearance represents SCM’s opinions, and should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results. The securities identified and described in this tv appearance do not represent all of the securities

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May 2, 2012

Has Anybody Here Seen My Old Friend Doomsday?

William Smead Chief Executive Officer Chief Investment Officer Dear Fellow Investors: One of my favorite songs of the late 1960’s was “Abraham, Martin and John”. It reminded us that a number of our country’s leaders had been assassinated. Investments aren’t nearly as important as life

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March 19, 2012

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