Posts in Investing
Finding Niches, Avoiding Valeants

FIM Group has long taken pride in our independent views. While we don’t necessarily set out to be contrarian, the nature of our value-focused investing often leaves us standing apart from the herd. This month we’d like to share some perspective about why we aim to avoid the herding instinct and how we go about keeping our thinking sharp and unbiased.

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Stein's Law

Herbert Stein, Chairman of the Council of Economic Advisers under the Nixon and Ford administrations, came up with a principle many years ago that has guided me over several decades of professional investing. Stein’s Law, as it is now known, is simply this: “If something cannot go on forever, it will stop.” In other words, unsustainable trends are unsustainable. 

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A Few Predictions for the New Year (and Beyond)

Now that we are a couple weeks into the New Year, most economists, market strategists, bloggers and other prognosticators have already pushed the send buttons on their annual forecasts for stock market levels, interest rates, foreign exchange rates and the like. Most will be off the mark come year-end, but that never seems to stop them from gazing into their crystal balls and letting the world know what they see. 

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Optical Discomfort

Investing with a thoughtful, proactive, transparent process, as we do here at FIM Group, can be uncomfortable at times. This month, I’ll address some of the discomfort that can occur with our approach. I’ll also share some thoughts on why I feel that by accepting some of this discomfort along the way, our approach can lead to better long-term outcomes than alternative approaches like indexing. Sprinkled throughout the newsletter, you’ll find a number of exhibits.

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Staying Disciplined Through the Bumps

Investment markets fluctuate. We all know that they do, and today they are fluctuating at lightning speed. The advent of electronic trading, exchange-traded funds (ETFs), and retirement accounts that can be switched with a click or a call has led to an avalanche of trading. TD Ameritrade, a brokerage that caters to individual investors, has seen its average trading volume per account rise around 60% in the past 10 years.

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Where Have All the Long-Term Investors Gone?

Everything is cyclical – spring/summer/fall/winter…recession/recovery/boom periods…deflation/inflation. An experienced farmer knows full well that weather directly affects the harvest, so he is prepared for both good and bad years. His success lies in the patient preparation and planting of the soil. Today, it seems that investors are obsessed with short-term performance (three years or fewer).

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Anxiety, Lazy Brains, and Investing

Why invest? Why get an education? Why not just live for today? Why plan, be forward-looking or think about the future? Of course these are loaded questions, but the answer is simple: We must be forward-looking because we live in the future and have no choice but to assume that the world will be here tomorrow, that the economy will not crumble and my home will still be standing.

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Responsible Investing

Often I am asked about our socially responsible investing and our core beliefs that guide our investment strategies. As investors that want to be responsible, thoughtful, and ethical in their investment themes, it becomes difficult with the landscape of ever-moving corporate management, investor’s fickleness and short-termism.

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