Season Investments



The Best of a Terrible Set of Choices

Posted on Dec 11, 2012

The US Treasury has just announced that it will sell its remaining 234 million AIG shares in its sixth offering since the rescue, thereby securing a $4.1 billion profit on its investment in AIG stock. But while the economic tethers of the bailout will soon be cut free, has the success of the AIG bailout created a slippery slope for future bailouts?

The Patience of Taleb

Posted on Dec 4, 2012

Nassim Taleb made his fortune with an uncanny willingness to lose small amounts of money the majority of the time in order to collect a huge windfall over short, punctuated “Black Swan” events. We see XVZ as having similar characteristics to Taleb’s strategy, and therefore believe it demands patience and a long time horizon in order to prove its investment merit.

Can the Stock Market Repeat?

Posted on Nov 27, 2012

This will be the first quarter of negative growth in the past eleven, and while the majority of companies beat bottom line earnings estimates, the 41% that beat top line sales estimates is the lowest since the first quarter of 2009.

Valuation Matters

Posted on Nov 20, 2012

Stock market performance over any time period can be broken down in terms of the change in the underlying earnings-per-share and the change in the P/E multiple. The best scenario is when earnings are growing and P/E multiples are expanding.If earnings are declining and P/E multiples are contracting then the market is facing dual headwinds.

Tipping Point for Interest Rates

Posted on Nov 13, 2012

The current path of government debt and central bank balance sheet expansion is clearly unsustainable.Everyone knows this and yet interest rates are at historically low levels. Will there ever be a tipping point which changes the direction of interest rates, and if so what will be the catalyst and when will it happen?

Margin of Safety with Closed-End Funds

Posted on Nov 6, 2012

"A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world." – Seth Klarman

The Ultimate Regressive Tax

Posted on Oct 30, 2012

The topic of taxes is hugely divisive with the big question being who should be taxed and by how much. What many fail to realize is that the unconventional monetary policies currently being pursued by the US Federal Reserve are the ultimate form of a regressive tax.

Fiscal Cliff Diving

Posted on Oct 23, 2012

With only two weeks to go before the election and only eight short weeks between the election and year-end, the fiscal cliff could be the most influential macro force on capital markets for the balance of the year.

The Troika Has No Clothes

Posted on Oct 16, 2012

Decision makers in Europe would be hard pressed to admit they believe Greece will grow its way out of debt, yet they continue to finance the problem that is Greece. How do these two things reconcile in the real world?

Thermonuclear Patent Wars

Posted on Oct 9, 2012

A wave of strategic patent acquisitions over the past 18 months bear witness to the “patent arms race” that is ensuing as technology companies scramble for ways to defend their intellectual property (IP). We became fascinated with this burgeoning trend a little over a year ago and have continually asked ourselves how we might be able to position our clients to profit from it.

Shanghai Hanging Low

Posted on Oct 2, 2012

The global slowdown and specific concerns over China’s economy have resulted in Chinese equities being one of the worst performing markets this year. This weakness largely reflects the market’s uncertainty surrounding the soft or hard landing debate. We believe the underperformance has left China’s market very attractive from a valuation standpoint.

Trading Sardines

Posted on Sep 25, 2012

A couple weeks ago Realty Income Corp announced it would be acquiring American Realty Capital Trust. Although we understand the reason for the sale, we are disappointed with the terms of the deal.