2011 Letters to Clients

If we learned anything in 2011, it’s that the “experts” know just as much about the short-term direction of the market as individual investors.

Which is to say: Nothing.

The year was notable not only for debt crises and stock volatility, but also because some of the most high-profile gurus in the investment industry made spectacularly wrong calls about where the “smart” money should be in 2011. Read More »


The four most dangerous words in investing are: “This time it’s different.”

- Legendary investor Sir John Templeton (1912-2008)

Consider the above quote from one of the most successful investors in history, who experienced nearly every major historical event of the 20th century. He died in 2008 at the age of 96, just as we entered the worst economic crisis he had seen since his teenage years. Yet, despite all the crises he had weathered as an investor – depressions and recessions, war and terror, impeachments and resignations – and all he saw coming in the financial crisis that was brewing at the time of his passing, John Templeton knew the biggest mistake investors made over and over again was based on an underlying, erroneous assumption: Read More »


Five hundred points.

That is the gain the Dow Jones Industrial Average logged in just four trading sessions the last week of June. An investor who stayed invested 11 of the 12 weeks during the quarter and then bailed out the last week when the news was at its worst would have locked in a 3% loss for the quarter. In contrast, an investor who stuck around that last week finished with a 1% gain. Read More »


Despite the fact that stocks have gained upwards of 20% since last August and are now back to levels last seen in 2007, the conventional wisdom amongst investors still seems to be oriented towards doom-and-gloom. We are not at all opposed to this, as we have long held to the old adage that “stocks climb a wall of worry.” That is exactly what we have seen these past seven months. Read More »