Johnny Russell, CFA

Stock Review: Fortinet (FTNT)

Stock Review: Fortinet (FTNT) We recently added Fortinet (FTNT) to our model stock portfolio*. FTNT is a leading cybersecurity company based in the U.S. with over 700,000 customers worldwide. In 2023, they generated $1.7 billion of free cash flow on revenues of $5.3 billion. FTNT is characteristic of the businesses that we like to own: They have an incredible…

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What Is Money For?

What Is Money For? Shelby Cullom Davis got his start in the stock market in the early 1940’s on the heels of the Great Depression. He bought equities on the cheap at a time when other investors had given up on the stock market and just as the United States emerged as the world’s most…

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Quarterly Client Letter: Q4 2023

“I think that a life properly lived is just learn, learn, learn all the time.” Charlie Munger, 2017 Berkshire Hathaway Annual Meeting Investing in financial markets is a constant education. A year ago, a Bloomberg survey of economists forecasted a 65% probability of recession for 2023. As the year progressed, there were plenty of reasons…

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Obsessing Over Interest Rates

Obsessing Over Interest Rates “The theory of interest bears a close resemblance to the theory of prices, of which, in fact, it is a special aspect. The rate of interest expresses a price in the exchange between present and future goods. Just as, in the ordinary theory of prices, the ratio of exchange of any…

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You Only Have to Get Rich Once

You Only Have to Get Rich Once Charlie Munger recently appeared on the Acquired Podcast. Needless to say, we are fans of Munger and recommend listening to the full interview. The interviewers asked Charlie what advice he would give to young people today. Charlie was, unsurprisingly, quite modest in his response. He spent considerable time…

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Keep It Simple

Keep It Simple “I refuse to join any club that would have me as a member.” -Groucho Marx I was at a dinner this summer with other portfolio managers from wealth management firms in the Denver area to talk about markets and investing. When we were asked if we invest in private markets on behalf…

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Rolling with the Punches

Rolling with the Punches The Federal Reserve has raised the effective Fed Funds rate over the past 18 months from 0% to 5.33%. The 10-year US Treasury Yield just hit a 15-year high around 4.30%. Mortgage rates are back above 7%. Source: YCharts via Peak Asset Management   If we had known that this is…

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Fool Me Twice: The U.S. Housing Market

Fool Me Twice: The U.S. Housing Market As markets internalized the risks of COVID-19 in March 2020, stock prices for home construction companies crashed (proxied here with ITB, the iShares U.S. Home Construction ETF). A precipitous drop in economic activity is historically bearish for home builders; perhaps in understandable fashion, investors rushed to sell their…

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Stock Review: VF Corporation

Stock Review: VF Corporation      We’ve written in the past about our mindset of buying businesses as a way to ground and guide our investment philosophy. In that spirit, we’ve recently added a new business – VF Corporation (VFC) – to our model portfolio. VF Corp is an apparel company that owns outdoor and…

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A Classic Bank Run

A Classic Bank Run By now you’ve likely seen the headlines or done some deeper digging into the recent collapse of Silicon Valley Bank (SVB). As of Sunday, March 12th the Federal Reserve (Fed), in coordination with the US Treasury and Federal Depository Insurance Corporation (FDIC), has implemented a new program to provide liquidity to…

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