Category: Investing

Whatever the flaws of Getting Back to Business, irrelevance to portfolio management is not one of them. The book provides a critical history of the current paradigm, and then proposes an alternative approach, written from the perspective of an active practitioner overseeing one of the largest dividend complexes in the country. So I had to laugh when a leading journal in the field of investment management declined to review the book, writing to my publicist, “Not that kind of journal.” Alas, this is consistent with how I expected the book to be received by the academic community, as discussed in …

A nice shout out from Barron’s, with some Warhol-esque imagery, at https://tinyurl.com/y7vmhpky Note: The views expressed here are those of the author alone, and do not necessarily reflect the views of his employer. Nothing written here should be construed as investment advice. Consult your investment advisor for specific recommendations.      

Earlier this month, McDonald’s (MCD) raised its quarterly dividend by a robust 15% to $1.16 per share.  McDonald’s is not currently owned in any of the portfolios that I manage on behalf of clients, but as a dividend-oriented equity investor, I am always pleased to see companies providing a tangible manifestation of their business success by increasing cash distributions to company owners. My next thought was about the share price. In my business-based view of the equity markets, an increase in the dividend—assuming it is sustainable and based on long-term profit growth of the underlying business, not just borrowing money—should …

As a stock analyst coming up through the investment ranks, I always wanted more information, never less. There was no risk of too much information. Quarterly reporting of cashflow statements and regular publication of detailed operational data seemed the bare minimum. The flood of numbers allowed me to build out elaborate company models that were the basis of my recommendations to the portfolio managers. My initial mandate included European securities, and I was dismayed that the they could and often did report less frequently and less fully.  The nerve!   Now as a portfolio manager, particularly one with a strong …

What do you get if you combine the subject of my first, academic career, with my current portfolio management job? The League of Militant Dividend Investors.

I just finished Mihir Desai’s delightful The Wisdom of Finance.   He takes on a big challenge: making finance intelligible to the general public by using stories from the humanities to make the points that financial economists do through mathematical formulations and dense articles in academic journals.  It’s an enjoyable take on risk and return, leverage, and other key concepts that investors should understand intuitively even if they can not or do not want to be compelled to understand it mathematically. Desai’s goal is to make modern finance understandable. My goal in GBTB leans more in the direction of debunking those very …

I am not expecting a warm reception for the book from the academic finance community. The reasons should be obvious: the book calls into question the mechanical “system” that academic finance has become over the past 50 years. My objection is not technical–with the exception of several M&M propositions–but subjective, even philosophical. The difference can be seen in an email I received from a senior professor whose work I greatly admire and to whom I had sent the book. He responded that “I buy stocks, not businesses.” With that simple statement, we part company.  The stock owner can go down the path …