Investment Management

Osbon Capital manages client investments like a college endowment would be managed: with capital preservation, growth and longevity as the primary goals. Nearly all of our investments are in highly liquid major publicly listed securities because they fit well with these client goals. However, from time to time unique direct investment opportunities can arise, and when they do, they can represent a good opportunity for a client to step outside of their traditional allocation. Here’s how we look at special situation investments:

US-based investors holding international investments are sorely tested these days. Stock markets outside the US have not been generous in returns recently, certainly not as good as US stocks. Furthermore, the dollar is up 9% this year, wiping out what gains are available overseas. Headlines aren’t helping. Brexit talk, regime change and America First have contributed to the concern for international investors. Have we reached a point where the reasons to abandon international investments outweigh all possible benefits? Here are the reasons to stay with international investments.

Gold remains an important asset class in global investment markets. With 190,000 tons mined and a market price of $1200 an ounce, the market value of gold is over $7 trillion dollars. While gold is a meaningful asset class, it has become smaller compared to the rest of the market because its price has been going down since 2011. Is it time to give up on gold? We say no, and here’s why.

September 2018 is the month to mark – not celebrate – the ten-year anniversary of the financial crisis. The crisis started on three specific days. First, Fannie Mae and Freddie Mac were put into government conservatorship on September 6th. Next, Lehman Brothers filed for bankruptcy on September 15th. Finally, AIG was bailed out by the government on September 16. Just recalling these events can give you the chills. What have we learned since then?

Apple is in the news again this week because of its Gathering Round conference where the company announces new products and upgrades. With every event like this comes a new round of price targets and buy/hold/sell recommendations from Wall Street analysts. Our question is why do they bother? Individual price targets are notoriously unreliable and can be dangerously wrong.

The FT ran a story this week asking if we’ve hit “peak passive.” Similar to peak oil, peak “X” refers to an asset class hitting a sort of critical mass or market saturation. It also vaguely implies that there is no more room to grow and down is the only direction possible. With millions of investors relying on portfolios of passive index ETFs, this could be a mass catastrophe in the making. Or is it? Let’s take an objective look at the perils and possibilities of passive.

Apple made headlines around the world last week when it crossed the $1 trillion dollar market value level. Apple’s value now begs the question, how much higher can it go? Is $2 trillion feasible? How about $4 trillion? Or has Apple grown so large it will begin to fade? Is the trillion dollar mark a limit or a launchpad?  

Where were we one year ago? Have your investments gained value or slid? It’s hard to keep track when economic and political news is so loud. We’ve had two years of market anxiety – from Brexit and nominee Trump to tariff trade wars and non-stop interest rate increases. Fears persist. So let’s take a mid-year time out and figure out which way is up.