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The Value of Lasting Moats

by: Lawrence Hamtil  on Thursday, August 31, 2017

First popularized as an investing concept by Warren Buffett, an economic moat is not much more than an advantage of some kind that allows a company to maintain and grow its position within an industry, thus ensuring healthy profitability.  The importance of a moat cannot be understated.  In fact, much of Buffett's success as an investor can largely be attributed to buying companies with wide moats, and avoiding those with narrow moats, which he has characterized as "too risky."     Read More

Global Industries: The Good, The Bad, & The "It Depends"

by: Lawrence Hamtil  on Thursday, August 24, 2017

Global equities are more alike than most investors might realize, and this is readily revealed when comparing equities at more basic levels, whether it be at the sector, industry, or even the individual company level.  Given that, it is instructive to see that no matter what the market, some industries are universal outperformers, meaning they tend to do much better than their respective broader universes, while others are the opposite, and lag their parent markets considerably.   Read More

Innovation, Disruption, and the Illusion of Value

by: Lawrence Hamtil  on Friday, August 18, 2017

Ten years ago, investors interested in the rapidly growing mobile device market were presented with two options, "Company A," which was the dominant player in terms of market share, and "Company B," which was a known player in the technology sector, but a newcomer to the mobile phone industry.  For value investors, the choice seemed to be clear as Company A traded at a steep discount to Company B no matter what valuation metric was used: Read More

The Real Benefit of Low Vol Strategies

by: Lawrence Hamtil  on Wednesday, August 09, 2017

In recent years, much has been written about the rising popularity (as measured by fund flows) of low-volatility portfolios with investors.  All sorts of explanations have been offered for this phenomenon, almost all of them specious.  For example, a popular theory holds that investors are now using low-volatility equity portfolios as 'bond replacements,' given anemic yields on traditional fixed-income.  More reasonably, another theory simply states that investors are engaging in performance-chasing, as returns on historically less volatile sectors such as utilities and consumer staples have been quite healthy over the last few years.  Whatever the explanation for the inflows, one recurring caveat issued by commentators has been that investors in low-volatility funds are trying to have the reward of the stock market without the risks that investing in equities entails as surely at some point volatility would reach even these quiet sectors of the market. Read More