Warren Buffett, the most quotable man in finance, issued his annual letter to Berkshire Hathaway shareholders last weekend. As usual, it provoked a lot of commentary and analysis (like this) that picked over what the Sage of Omaha really thinks about investing. Among those nuggets are that he still regards buying Tesco stock as a “big mistake" and he'd “dawdled' by not selling it sooner. More broadly, he reiterated his view that diversified portfolios of stocks held over a multi-decade horizon at low cost is easily the safest approach for most investors. There was an interesting dissection in the New York Times about the reasons why Berkshire has been so successful.
On the subject of long-term investment horizons, this is a great article on the merits of buy-and-hold. Apparently, the US-based Voya Corporate Leaders Trust Fund bought equal amounts of stock in 30 major American companies back in 1935 and hasn't picked a new stock since! And it's returns have still been better than 98% of other large value funds over the past 10 years.
This week at Stockopedia we looked at the strong performances of some of the contrarian value screens of David Dreman and John Neff. Meanwhile, London's small-cap indices have seen some slow and steady positive uptrends in recent weeks, which is good news for our small-cap expert Paul Scott, who covered results from the likes of staffing group Impellam and car retailer Cambria Automobiles.
Around the web
Meb Faber, an American fund manager and blogger, published a new book this week called Global Asset Allocation. In it, he examines the performance of different asset allocation strategies and concludes that most, over 30 years, produce very similar results. It turns out that choosing a balance between asset classes is far less important that simply sticking to whatever strategy you choose and keeping it in check. Moreover, trading costs over the long term are by far the biggest influence on (and risk to) investment returns. John Authers in the FT picked up on this here. Separately, in early 2014 Meb pointed out that Greek stocks were, on average, the cheapest in the world. This week we had a look at where value opportunities might still exist in Greece.
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