From World Headquarters
PremiumPoints 1Q-2023: The Secret Sauce
For this edition of our newsletter, there is a wealth of material for us to draw on: from the private equity plunderers moving down market to lure retail investors, to the rise of “buffered” ETFs, to the fallibility of veteran investment professionals, to the 2022 results of the largest sovereign fund in the world--the Norway Fund. Inflation has proved more stubborn than central banks bargained for when prices started surging two years ago. Now some economists think they know why: Businesses are using a rare opportunity to boost their profit margins. Like many other investment professionals, we pay attention to what the Oracle of Omaha has to say in his annual report to shareholders. Arguably one of the most successful investors of all time, Warren Buffet has been compounding the value of his flagship company Berkshire Hathaway since the 1960’s. The private equity plunderers are coming for your money. They have been enriching themselves at institutional pensioners expense for years. Now that many boards and trustees are wising up to the private equity value proposition of mediocre returns and high costs, the plunderers need to look elsewhere for sheep to shear. Early in the life of Clothier Springs Capital Management we had an informal advisory board of investment professionals we thought would be helpful. They were not but that’s a story for another time. One of the board members was the retired Chief Investment Officer of a large bank-owned mutual fund complex. We will call him Chuck. From the (Norway) Government Pension Fund Global Annual Report 2022—the largest sovereign fund in the world. At year-end 2022 its value was 12,429 billion kroner (12.429 trillion). Read about how the Norway Fund invests and reflects on market adversity. We at CSCM long ago abandoned the notion that we could pick stocks and outperform the broad market averages. In fact our services are premised on exactly the opposite notion—that building broadly diversified, globally allocated, low-cost portfolios are the most direct path to better investment outcomes. Coldplay performing “A Sky Full of Stars” at a recent concert in Buenos Aires, Argentina. It is from a sold-out, ten-night run. Very few bands bring the energy and inspire as much joy as these guys do.
Read More......“Why Is Inflation So Sticky?
Read More......Lessons From the Oracle of Omaha
Read More......Private Equity Plunderers
Read More......The Greatest “Short”? Not So Much
Read More......Norway Fund
Read More......The Active Management Delusion
Read More......Coldplay
Read More......