investing

One of my investing idols, Howard Marks, regularly mentions something he learned as a college freshman back in 1963: you can’t judge the quality of a decision by its outcome. This seems very counterintuitive at first glance. But in the world of investing especially, it is spot on.

The dual battle against the covid-19 virus and resulting financial turmoil continues. As it happens, in my annual State of the Markets presentation this year, I spent some time discussing economic history. This is a subject I’ve been increasingly reading about over the last 18 months.

Warren Buffett’s annual letter to shareholders was released last weekend. For me, it is one of the most refreshing things to read every year. In my opinion, Mr. Buffett’s views about investing are more cogent than any other investor in history. Like no one else, he has a way of cutting through the jungle of “noise” and focusing on what really matters.

One of the hardest parts of investing is intelligently evaluating how things are going. This is especially true for publicly traded companies (stocks) or strategies (like mutual funds) that invest in them. The problem is financial assets tend to fluctuate wildly from year to year.

In mid-February, we hosted our annual “State of the Markets” breakfast. Once again the weather was crummy. In fact, the snow was bad enough that schools closed locally. That’s the second time in four years we’ve held our event on a day that school was canceled!

It’s official, we’re currently amidst the longest bull market in US history (as measured by the S&P500 at least).  According to data from JP Morgan, the average S&P500 bull market since the 1920s has lasted about 55 months. The current rally is now in its 113^th month and just passed the previous record which ran from October 1990 to March of 2000.

I recently spent several days in Los Angeles visiting an asset manager that I hold in high regard, First Pacific Advisors (FPA). The event was a biannual opportunity to hear from each of the firm’s portfolio strategists, ask questions and meet their respective teams.