October 25, 2019 Over the past decade, stock markets have drifted far from their typical behavior in several ways. There is a big opportunity at hand if markets should end up moving back towards normal as they generally have in the past. This idea is known as “mean reversion” in …
San Diego housing: measuring valuations, the role of rates, and whether to buy now
August 6, 2019 Excerpted from a letter to clients sent August 1, 2019. Anyone can sign up for our quarterly updates here. Measuring housing expensiveness We all know that buying a home in San Diego costs a lot more than in most cities. But that's always been the case, and …
Trends can change fast in financial markets (so don’t get caught up in the recent past)
January 17, 2019 Excerpted from a letter sent to clients on January 16, 2019 Our last letter discussed how US stocks had diverged from international stocks by continuing upwards as the rest of the world drifted downward during the middle part of 2018. US stocks went on to decline …
Why put up with the pain of being different?
October 15, 2018 Excerpted from a letter sent to clients on October 15, 2018 As we've emphasized over the years, our global, value-based investment approach demands a multi-year timeframe. We often cite 7-10 years as the appropriate period to think about when planning or assessing …
Volatility and the return of inflation risk
April 29, 2018 In our last quarterly update, we focused on the extreme stock market optimism that prevailed at that time in late January. At that point, the market was up almost 7% for the year and, as we discussed, investors were by some measures more bullish on stocks than …
What to do when everyone’s optimistic (plus: Bitcoin vs. the Tech Stock Bubble)
January 31, 2018 The world economy has continued to strengthen. Growth in both emerging and advanced countries has been on the rise, with the latter showing a particularly rapid comeback: This is actually the first time since the global financial crisis that all the world's …
How to Think About Market Risk
November 2, 2017 Renewed optimism about economies and markets has led to an unusual calm. Global stock markets have gone up in practically a straight line since the post-Brexit vote correction ended in mid-2016, and here in the US, markets are by many measures the calmest they've been in …
Valuation Thin Air
August 8, 2017 We discussed why we're leery of US stocks in the last article: they just aren't priced for very good long-term returns, especially when compared to much less expensive markets outside the US. Here's another way of looking at it, from AMP Capital: This chart …
Thoughts on the San Diego Housing Market
June 19, 2017 The median price of a San Diego home recently surpassed its all-time peak, as noted by the San Diego Union-Tribune (with a cameo appearance from Rich). We thought this made for a good opportunity to share some thoughts on the local housing market, addressing common questions …
Prospects look far better for international than US stocks (but US investors are loaded to the gills with the latter)
May 13, 2017 With so much news and commentary these days focused on politics, some people might not realize that there's been a noticeable strengthening of the global economy. Below are a couple of charts to support this point. The first shows global manufacturing Purchasing Managers' …