Investments 2017-05-22T18:18:21+00:00

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33 Countries Ranked by Value

Benjamin Graham, the forefather of fundamental value investing once taught Warren Buffett, “Price is what you pay. Value is what you get”. Since Benjamin Graham wrote Security Analysis in the 1930’s, more academics, quantitative analysts, and Warren Buffett, have made strong cases that value investing outperforms the general market over the long term. In one example, Buffett’s firm Berkshire Hathaway employs value investing, and their track record outperformed the S&P 500 by 1,586,929% over the last 51 years. (1964-2015 Berkshire Hathaway gained 1,598,284% while the S&P 500 gained 11,355%) As we like to build upon our predecessor’s learnings, HIT Investments [...]

By | February 20th, 2017|Investments|2 Comments

Value vs. Price: The Difference is Very Real

Our natural human condition is to know and communicate the price of a product while ignoring the product’s value. Oscar Wilde once said “Nowadays people know the price of everything and value of nothing.” This is a fundamental flaw in how we think and it has played a part in strengthening the consumerism culture we live in today. An everyday example of a marketer taking advantage of this flaw is the marking up of an item by 50% to only then place it on sale for an equivalent 50% off. If we were a value based society, that would be [...]

By | October 10th, 2016|Investments|1 Comment

5 Oil and Gas Stocks to Contemplate While Oil is at a 10 Year Low

Global oil production has been outpacing demand for over two years. This oversupply has pushed oil prices to lows not seen in more than 10 years. For consumers this is a welcomed reduction in fuel prices; but for the independent producers the price decline is causing extreme pain. According to Haynes and Boone, 42 energy companies filed for bankruptcy in 2015 and Deloitte believes 35% of the remaining energy companies are at risk of declaring bankruptcy in 2016. Our in-house analysis found 38 of the 91 independent producers to be at risk of bankruptcy if financing dries up and oil [...]

By | April 11th, 2016|Investments|0 Comments

Stock Buyback – A Dividend Alternative

In the last newsletter we discussed a few of the inherent consequences of dividends. This article compares the dividend to one of its alternatives, the stock buyback. Stock buybacks, otherwise known as share repurchases, occur when a business purchases shares of its outstanding stock from the shareholders. Importantly, the fundamental value of the business does not change. The result is an increase in the ownership percentage of each remaining share. For example, if a company has 100 shares and is worth $100, each share is worth $1 and has a one percent ownership interest. If the company buys back 50 [...]

By | February 29th, 2016|Investments|2 Comments

DividEND – Exploration of the Dividend and Why it May No Longer be the Best Option

Businesses should consider the objectives of their shareholders like you and me.  After all, we are the owners of the business.  This article explores the dividend and suggests to businesses why the dividend may no longer be the best way to reward loyal shareholders like us.  An upcoming newsletter will take a deeper look at one of the alternatives, the stock buyback. Dividend producing businesses have long provided a steady stream of income to their investors.  Historically investors have depended on dividend income to fund their retirement and pay their monthly bills.  Dividend production has also been a key metric [...]

By | February 24th, 2016|Investments|2 Comments

Investment Costs Matter

“Whether markets are efficient or inefficient, investors as a group must fall short of the market return by the amount of the costs they incur.” – John Bogle Market returns are unpredictable but costs can be known.  When investing you should not assume when paying higher costs that you are therefore receiving a better product.  It is possible that the higher cost is made up for by an excellent manager, but in most cases and especially between similar passively managed funds, the lower cost fund is a better option. For example, 50 years ago you invested $10,000 in a fund that returned the S&P 500 [...]

By | January 8th, 2016|Investments, Personal Finance|0 Comments