https://www.bearingasset.com/blank-page daily 0.75 2020-12-07 https://www.bearingasset.com/home2 daily 0.75 2020-12-07 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649408369-PXSHA7H72S9HIOUAEG79/JessieWebster_Treehouse_25.jpg Home2 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649540510-QSKJAQIG204PECMOI951/JessieWebster_Lifestyle_36.jpg Home2 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649560980-TJFVP70WNTI3EWL6S2E3/JessieWebster_Squarespace_02.jpg Home2 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649635680-82DV3JGUVGWQTWLYKJ4I/JessieWebster_Squarespace_15.jpg Home2 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649636345-G17L0L04ZZ8QWCH17OGO/JessieWebster_Squarespace_24.jpg Home2 https://images.squarespace-cdn.com/content/v1/5ce411e027fc6d0001873d29/1561649420417-VRPMEX02W7CUHS4T01OQ/JessieWebster_Treehouse_26.jpg Home2 https://www.bearingasset.com/contact-2 daily 0.75 2020-12-08 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607367944849-EM5W0KT3F4X4OX2SI5D5/C6+Block+of+Four.jpg Contact 2 - “An investor who has all the answers doesn't even understand all the questions.” — Sir John Templeton https://www.bearingasset.com/bio daily 0.75 2026-04-02 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607358865193-CJZGHGFO269DUQ778VC9/Duffy+-+business+casual+headshot+1.jpg Bio https://www.bearingasset.com/investment-selection daily 0.75 2020-12-09 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607434588119-MDJN75MLK06ULIJQPR93/Skin+in+the+Game+%28Gray%29.jpg Investment Selection https://www.bearingasset.com/portfolio-construction daily 0.75 2020-12-09 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607436021492-2SED2BH5PFR1P56EHU9F/Compartments+of+Titanic%27s+Hull.jpg Portfolio Construction https://www.bearingasset.com/investment-trends daily 0.75 2020-12-11 https://www.bearingasset.com/home daily 1.0 2020-12-09 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607483955027-XC60LQMUKSFW3IL266DC/Lindbergh+First+Day+Cover+2.jpg Home https://www.bearingasset.com/media daily 0.75 2020-12-07 https://www.bearingasset.com/inflation-2 daily 0.75 2020-12-08 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607438394142-42UJ5NLONM37ZSSTKFAG/Is+Inflation+Dead+Cover+-+2019+Apr+22.jpg Inflation 2 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607438486848-SV16GSUFSOU08LLDTNF2/C1+Block+of+Four.jpg Inflation 2 https://www.bearingasset.com/commodities daily 0.75 2020-12-22 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607397019847-XJPY4B7NIAR6BAPREILB/Copper+Mine.jpg Commodities - The imminent death of fossil fuels is exaggerated. Commodities are entering a long bull market. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607376714670-QMZV9C31H09G7H2SMMRT/C46+Plate+Block.jpg Commodities - “Years of subpar investment in productive capacity in the things that the world needs more of, is the essence of the bull case.” — Jim Grant https://www.bearingasset.com/retailers daily 0.75 2020-12-28 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607382771997-XLGIKI5AKN3Z4WTAOYAQ/Retail+Apocalypse.png Retailers - Amazon.com is not going to put all retailers out of business. The “death by Amazon” trade is well known. The prices of many retailers are in the bargain bin, especially those with exposure to shopping malls. For some, it will be “turn out the lights.” But for the survivors, there is a silver lining: less competition and better terms as tenants. Meanwhile, nearly all retailers are converging towards the omni-channel model: online, in-store and BOPIS (buy-online-pickup-in-store). Spurred by Covid-19 and lockdowns, 2020 was a banner year for retail bankruptcies. Department stores were particularly hard hit, with J.C. Penney, Neiman Marcus and Stage Stores all filing Chapter 11. The oldest department store chain in the U.S., Lord & Taylor, also cried “uncle.” Survivors like Kohl’s and Nordstrom are clear beneficiaries, yet their stocks were caught in the maelstrom. In fact, both were unceremoniously removed from the S&P 500 after the worst of the selling had passed. The untold business story of 2020 has to be the resilience of the omni-channel approach. Across the board, the best-positioned companies saw their e-commerce revenue take up much of the slack from closed stores. Many retailers also have footprints in suburbs and states that benefit from migration out of the cities and high-tax states like California. The cherry on the sundae: many retailers are run by entrepreneurs with significant ownership stakes. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607382048766-J9WPPKPE6UTFKTOTRAMX/C28+Plate+Block.jpg Retailers - “Adversity removes the fragile and spares the robust.” — Kevin Duffy https://www.bearingasset.com/value-investing daily 0.75 2020-12-13 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607397181943-9BK5UJK2BT8ZOC8MXPCI/Value+vs.+Growth.png Value Investing - Value investing is not dead. Passive investing is not going to put all active managers out of business. Investment styles tend to go through long cycles: Value investing peaked in the late ‘80s as takeover stocks were all the rage and investors feared “America’ s decline.” Japan was a rising star and Silicon Valley’s dominance was even in doubt. Growth investing was on fire in the ‘90s, peaking in 2000 with the Nasdaq breaking 5,000. The Internet was the next new thing and investors couldn’t own enough dot-com lottery tickets, jettisoning “Old Economy” value stocks in the process. As tech stocks peaked, value stocks bottomed. Value went on to outperform for 7 years, culminating in the 2007 credit bubble top. From 2007-2020, disruption ruled. Growth stocks were led by the unparalleled success of companies like Amazon, Facebook, Google, Apple, and Netflix. Value stocks underperformed dramatically for 13 years. (Btw, the graph to the right is somewhat out-of-date. The ratio of growth-to-value is now closer to 0.5.) While investors have piled into large, liquid stocks like the FAANGs through index funds, many smaller, value-oriented stocks have been left for dead. The divestment of fossil fuels and lockdowns of “non-essential” brick-and-mortar businesses have only added to the pain. In 2000, not one of the ten largest tech stocks by market cap beat the market over the next 10 years. Index funds top-heavy with the FAANGs + Microsoft and Tesla will be dragging around a boat anchor compared to their fleet-of-foot value brethren over the next decade. Meanwhile, on December 21, 2020, Tesla was added to the S&P 500; its market cap of over $700 billion exceeding that of the entire global automobile industry. Index fund buyers are buying the stock after a 7-fold runup in 2020. (See “Bear Market.”) This is reminiscent of Yahoo! being added to the S&P 500 in December 1999, just 3 months from the tech bubble peak. Asset management is a good business with low fixed costs and high operating margins. Passive managers like BlackRock command premium valuations (7x annual revenue) compared to their out-of-favor active cousins (1-2x). Many of the smaller, active managers are run by founders with skin in the game. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607453563825-N5O37X7N6IWT6DC14D7H/C51a+Booklet+Pane.jpg Value Investing - “I think the opportunity today is in small cap value and fundamental research while everyone is paying attention to the macro and the craziness of what's going on in trying to day trade.” — Aaron Edelheit https://www.bearingasset.com/genomics daily 0.75 2020-12-22 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607396539566-T6HJVU447Z771Q4ARAFY/Cost+per+Genome.jpg Genomics - The population is aging and the genomic revolution just getting started. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607395843403-79BHYOXU74DZAGX07TW5/C18+Baby+Zeppelin.jpg Genomics - “Everything that is really great and inspiring is created by the individual who can labor in freedom.” — Albert Einstein https://www.bearingasset.com/bear-market daily 0.75 2020-12-13 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607394677150-LYFN6ATFS6N0ZON1PZF1/Barrons+Cover+%28Is+the+Bull+Unstoppable%29+-+2019+Apr+8.jpg Bear Market - The risks of prolonged recession and a severe bear market are high. Comparing financial bubbles is not always easy, like comparing Michael Jordan to Wilt Chamberlain. While the basketball greats were 27 years apart, the last technology stock bubble was 20 years ago. The darling of 2000 was networking giant Cisco Systems, peaking at an enterprise value of $512 billion, or 53x annual gross profit and 114x annual operating income. The posterchild of today’s “everything bubble” has to be Tesla, tipping the scales at $726 billion, or 122x gross profit and 411x operating income. Keep in mind, without tax credits (subsidies), Tesla barely breaks even. At current prices, Tesla is worth more than the small cap universe (as measured by the Russell 2000) and the entire S&P 500 energy sector. Such out-of-whack valuations are symptomatic of the many distortions in the economy after 12 years of zero interest rate policy (ZIRP) and asset inflation. Add a mountain of government and corporate debt, lockdowns in response to the coronavirus, the moral hazard of financial bailouts and stimulus packages, and baby boomers set to retire and tap into a trust fund that’s been drained, and it is not difficult to envision “challenging times” for the global economy. Clearly none of this is discounted by a stock market trading at a market capitalization-to-GDP of 160%, its highest in history. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607395017325-RDWJPXH8YH2SDPXTNMDW/C8+Plate+Single.jpg Bear Market - “Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” — Sir John Templeton https://www.bearingasset.com/inflation daily 0.75 2020-12-22 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607439170021-FR1Y467C5M8S2YSCRJUQ/Is+Inflation+Dead+Cover+-+2019+Apr+22.jpg Inflation - Inflation is not dead. Precious metals will benefit and the global bond bubble will burst. https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607439203545-XAYQ6TIFLQHBOF3H25MV/C1+Block+of+Four.jpg Inflation - “When you destroy the money, you destroy the glue that holds society together.” — Tony Deden https://www.bearingasset.com/contact-us daily 0.75 2024-01-24 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/1607451488800-6FVT7ITA7SG2SK99QDEV/C6+Block+of+Four.jpg Contact Us https://www.bearingasset.com/edges daily 0.75 2024-01-24 https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/7ccd7446-f65f-4645-847b-751bfbe9c3cd/Edges+-+Take+the+Long+View.jpg Edges Take the long view https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/b56262c2-6b11-4a4e-87b0-0714db09adce/Edges+-+Cast+a+Wide+Net.jpg Edges Cast a wide net https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/3b376948-e273-4f8a-acbf-3c6274b225fe/Edges+-+Think+Apart+From+the+Crowd.jpg Edges Think apart from the crowd https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/148e4222-d56d-48b4-ba71-076759647a23/Edges+-+View+the+World+Through+a+Non-interventionist+Lens.jpg Edges View the world through a non-interventionist lens https://images.squarespace-cdn.com/content/v1/5fcd823ccc0d2519aa9bb505/3f36da94-436c-49c4-bd3c-bb224b135489/Stamp+-+Barbados+Casting+Net.jpg