Investing

Three French Hens (from December 2010)

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An oldie but goodie flashback. This countdown nostalgic moment comes from the selection of  Vistaprint (VPRT) during our 12-day Christmas Countdown during December 2010.

It was a dark, foggy … actually quite misty … night and I stood and shivered while waiting patiently in the shadow of the Eiffel tower.  I had called Bob Woodward to see if he wanted to come with me, but he had too many Washington D.C. holiday parties to frequent.  I thought to myself, “… even if impaired, he has more experience at this sort of thing than I do.”  It felt good to “hear” some English, even if it meant talking to myself.

My respite was shattered by some rustling.  I peered over my shoulder to see three french hens, decked out in trench coats, scratching their way to me.  I nodded.  It was clear that no password was necessary … but that another bottle of wine wouldn’t hurt.

“Bonjour, Monsieur Manifest.  Comment allez-vous?”

(Great.  More French.) “Greetings.  Do you speak any English?”

“Desole (sorry) … until tonight, we didn’t know that we could speak.”

“No problem.  You’re talking to someone who once wrote that he did stock studies with Elvis at a Denny’s in Kalamazoo.  Anything is possible.”

“Ah! Elvis! Tres bien!  Magnifico!”

“That sounded like a little Spanish?”

“We’re working on our diversity in the hen house.”

“Splendid.  Did you bring the information?”

“Oui.  But try as we might … and we did … we couldn’t find a French investment opportunity for you.  You did that session on Sanofi-Aventis a couple of years ago.  Our advice is to keep Sanofi on the radar screen.”

“What did you come up with?”

“It’s Dutch.  But it seems to fit with the festive season … you know wooden shoes and that Kris Kringle thing.  The company makes holiday cards, too.”

“I’m waiting … if you’re waiting for Woodward, he’ll not be joining us.”

“Americans.  So impatient.  (cackling audible)  The company is Vistaprint (VPRT).”

“Merci.  Have a wonderful holiday season!”

“Au revoir …”

Vistaprint (VPRT) offers small businesses everything they need to market their business. We offer high-quality printed marketing materials, promotional products and marketing services such as copywriting, design, websites and postcard mailing.

Sales Growth Forecast

The company is still relatively small, but growing, and transitioning from a small to medium-sized company.  Higher sales growth rates have been replaced by forecasts that are moderating.  The company is susceptible to recessions (impact on smaller and medium-sized customers) but has been flagged by some analysts — including a cheery consensus — to benefit from economic recovery and small business incentive programs.

The big slowdown in small-medium business spending really hurt Vistaprint, which provides printing and marketing services to companies that are too small to handle their printing needs on an in-house basis. Shares plunged in early August, which looked to me to be a severe over-reaction.

Analysts at Kaufman Bros. see shares rebounding back from a recent $37 to $50 as the company’s sales problems this summer prove to be short-lived. “Vistaprint is currently facing a perfect storm, with small business weakness, adverse (foreign exchange) impact and recent execution issues. We note that all these factors are temporary, and should reverse themselves in the future,” notes Kaufman’s analysts. They predict that shares, which currently trade for 13 times next year’s profits, will trade up to a price-to-earnings (P/E) multiple of 20x once these near-term concerns abate.

Spending at small businesses is likely to rebound only slowly into 2011 and perhaps more robustly into 2012. But investors need to look ahead, and these stocks could start to appreciate handsomely, simply on the expectation that small and medium-sized business spending will eventually rebound …

Profitability Trend and Analysis

Historical net margins are in the 10% range with analyst expectations for 2011-2012 in the 12% range.  This may be optimistic but the company appears to be capable of delivering.

Value: Projected Average P/E

This is a “classic” aging curve — displaying a decaying trend for P/E as the company matures and moves from a small to medium-sized company.  Growth rates in the 30-40% and above have been replaced by expectations less than 20%.  The P/E forecast must naturally follow.

Equity Analysis Guide

Based on a sales growth forecast of 17%, profitability in the 12% range for net margin, and a projected P/E ratio down from historical levels (but still ample) at 22x … the projected annual return (PAR) is 16-17%.

We’ll close with the Christmas Card that I built while visiting their web site (http://www.vistaprint.com) and doing some research on the company.

From partridges to doves to hens, I’m spending a fair amount of time with the winged animal kingdom and now I have to figure out what a “calling bird” is and see if I can locate four of them … (to be continued)

Reminder: This is an educational demonstration with companies used for illustrative purposes.  NO INVESTMENT RECOMMENDATION IS INTENDED.  Do your own homework and make your own decisions.

Things That Go Bump In The Night

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During a recent Round Table webcast, Hugh McManus (March 2011)  shares that humans aren’t necessarily “wired” to deal with the challenges of investing and that we have to seek means of dealing with it.

When you’re sitting around the campfire, noises from the darkness are generally BAD. Fear of darkness isn’t necessarily a bad thing. It just might save your life under the right circumstances. But that same core of human instincts is closely related to why investors in general make bad investing decisions when clouded by emotions and/or adrenaline. During our February Round Table, Hugh McManus shared stories of cavemen, mammoths on the bad end of a spear … our quest for fat (the perfect food) … all while weaving a tale that explained why Vulcans will choose Earth as a perfect retirement village. Turns out our stock market is pretty good hunting for them.

Webcast: Things That Go Bump In The Night (Approx. 24 minutes)

For more information and archived Round Table sessions: http://www.manifestinvesting.com/events

Little Nudges Can Make A Difference

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Originally Published: November 2010 (Expected Returns newsletter)

If you’ve ever wondered how the “little things” in life make a difference, we invite you to spend a few moments with career teacher and retired principal Ken Kavula and his wife Natalie. Scores of investors have been favorably affected and influenced by them. Natalie is a career teacher also. They have both served as volunteers for the national umbrella organization for investment clubs (NAIC) and have delivered a number of educational opportunities and events for investors in all parts of our community. Based on the impact, it’s clear that sometimes “little things” aren’t so little, after all. As Ken often reminds, small companies can deliver large impact on our investing journey.
Investing together is something Ken and Natalie Kavula enjoy. This photo, taken after Ken received a lifetime achievement award for excellence in volunteerism, is from an NAIC national convention. Ken stipulates that any first person “I” in this story should really be a “we”. Natalie and Ken are partners and their family investments are jointly managed. That includes studying, buying, maintaining and selling! “We do it all together and we wouldn’t have it any other way.”

For more: Little Nudges Can Make A Difference

Annual Dashing of Sugar Plum Visions

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Wall Street analysts are a fascinating bunch and a bit of a mystery. Why? Because the vast majority of the time they’re an exuberantly optimistic lot. Visions of 15% earnings growth dance perpetually in their heads and the 15% long-term forecasts roll reliably year in and year out. If the current year is “n”, then n+1 and n+2 are virtually always robust.

But the fourth quarter arrives, year-in and year-out … and they turn grinchy. Some years they’re more grinchy than others and the current edition fits that bill. Where once visions of 12-14% year-over-year change in aggregate EPS forecasts danced in their heads, this has been replaced by a somber 6-8% (and they’re not done yet — they still have 10-14 days to reduce their 2012 forecasts.) 🙂

Barry Ritholtz reports regularly on this and recently reminded that dancing on and dashing sugar plums into mincemeat is common fare at this time of year. See: Analysts Get Gloomy Right On Schedule

As we’ve been pointing out for several months, there’s been considerable optimism baked into the overall forecasts — and one of the reasons that the current “recovery” still feels a tad recessionary can be seen in the accompanying figure.

Note the sugar plum optimism for 2013 forecasts. Also note that although only “8% of precincts are reporting” with 2014 forecasts so far … as they roll in, they appear headed for the time-honored land of 15% year-over-year growth — no matter what history suggests.

History suggests that they’re always 50% high (15% forecast versus 8-10% actual) and that studious investors are well-advised to completely ignore analyst consensus estimates when it comes to % EPS Growth.

We do. And the sugar plums are grateful.

Intelligent Investing

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Among the library of investment books promising no-fail strategies for riches, Benjamin Graham’s classic, The Intelligent Investor, offers no guarantees or gimmicks but overflows with the wisdom at the core of all good portfolio management.

“If you read just one book on investing during your lifetime, make it this one.” — Fortune magazine.

I’ve read it at least two, maybe three, times. Maybe it has something to do with falling leaves and spending a few quiet moments during autumn beside the pond in my back yard. As we embark on a series of case studies and research into what George Nicholson called, “Broadening Your Investment Management Program,” I found myself spending time with Benjamin Graham’s “The Intelligent Investor” again. Warren Buffett knew Graham well (Ben taught Warren how to invest as his professor at Columbia and as a professional colleague) and says, “I read this book as a 19-year-old. I thought then that it was by far the best book about investing ever written. I still think it is.” If you’re serious about learning to invest intelligently, how can you avoid it?

The Intelligent Investor is a book for true investors … inherently for the longer term and requires a commitment of effort. The true investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains … Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.

MANIFEST contributor Ken Kavula often speaks of discipline as the greatest gift bestowed by George Nicholson, Jr. upon the modern investment club movement. Graham and Buffett mention patience and discipline frequently and routinely. On the next few pages, we’ll share some of the highlights from the book. My copy is dog-eared, highlighted and yes, I’ve even written notes in it. Relax, Sister Rita Claire taught me that it was OK to write in books and bend pages so long as it didn’t say “Property of St. John’s” inside the front cover.

In the most recent edition, Jason Zweig makes a solid contribution with editorial remarks and commentary as a continuous “side bar” throughout the book. In his introduction, Zweig listed his interpretation of Graham’s common sense and core principles. Here is how I’d play them back:

1. A stock is not a ticker. Think ownership in an actual business.

2. The market is a pendulum. Momentum creates opportunity during both bear and bull markets.

3. The value of any investment is merely a function of its current price. That value is established by the projected return which is based on the current price and a reasonable expectation for a future price.

4. Insist on suitably high projected returns (but not too high) to build a margin of safety into the decisions you make.

5. Invest with patient confidence.

“If you have built castles in the air, your work need not be lost, that is where they should be. Now put the foundations under them.” — Henry David Thoreau, Walden

Hmmm. If memory serves, Thoreau used to spend quite a bit of time by the pond, also. Interesting that Zweig chose that for the first comment. We’ll now dig in to some of the highlights from my dog-eared pages …

The Myth of 15% Growth

Graham spends time defining investing vs. speculating and investing defensively vs. what he referred to as “enterprising investing.” Our community of investors would easily qualify for the enterprising label.

Many of our colleagues still believe that the magic 15% number cited by NAIC/Better Investing refers to growth characteristics. It doesn’t.

“… only 8-of-150 largest companies on the Fortune 500 managed to increase their EPS at least 15% for two decades during 1960-1999.”

“… only 10% of large U.S. companies increased EPS by 20% for at least five consecutive years, only 3% achieved this for 10 years straight; and not a single one had done it for 15 years in a row.”

The 15% refers to long-term annualized returns for total portfolios.

Market Fluctuations

Common stocks, even of investment grade (relatively high-quality), are subject to recurrent and wide fluctuations in their prices. The intelligent investor should be interested in the possibilities of profiting from those pendulum swings. Every investor who owns common stocks must expect to see them fluctuate in value over the years. [195]

The investor with a portfolio of sound stocks should expect prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. Remember that market quotations are there for convenience, either to be taken advantage of or to be ignored. Never buy a stock because it has gone up or sell one because it has gone down. [206]

Patient Focus — Things That Matter

“… investors who receive frequent news updates on their stocks earned half the returns of investors who got no news at all. [223]

Consider this another important attribute of investment club practices, the notion of meeting monthly. In some cases, reactive decisions to events that were not made have turned out to be some of the best decisions overall.

Researchers Brad Barber and Terrance Odean divided thousands of traders into five tiers based on their turnover. Those with less frequent transactions (at the left) kept most of their gains. Impatient and hyperactive traders make yacht payments for somebody else. (Source: Barber and Odean, University of California at Davis, and Berkeley, respectively.)

The Math — Keep It Simple

… in 44 years of Wall Street experience and study, I have never seen dependable calculations made about common stock values, or related investment policies, that went beyond simple arithmetic or the most elementary algebra. Whenever calculus is brought in, or higher algebra, you could take it as a warning signal … of substituting theory for experience … or to give speculation the deceptive guise of investment. [282]

Occam was right about his razor.

This is the prevailing thinking behind our emphasis on (1) top-line growth, (2) profitability and (3) reasonable and considered forecasts for P/E ratios … and the math behind it all is relatively simple.

Aggregate Forecasts

…individual forecasts can be wide of the mark. Our general view is that composite or group estimates are likely to be a good deal more dependable than those for individual companies. [288] Think dashboard averages. Think MIPAR.

Smartly Own

When you buy a stock, you become an owner of the company. … there is just as much reason to exercise care and judgment in being an owner as in becoming a stockholder.” [499]

The prudent homework and diligence shouldn’t end when the purchase decision is made. Proportion your time and attention appropriately between candidates for purchase and your holdings.

Trapping Bulls & Quality

George Nicholson warned of swapping high-quality for lower quality stocks as bull markets rage as one of the most dangerous things that an inexperienced investor could do.

Here we find Graham’s own warning on the same behavior: The risk of paying too high a price for good-quality stocks — while a real one — is not the chief hazard confronting the average buyer of securities. Observation over many years has taught us that chief losses to investors come from the purchase of low-quality companies at times of favorable business conditions. [516]

Translation: Avoid lower quality companies when MIPAR is in single digits.

Investing is most intelligent when it is most businesslike … disciplined … and superior results are possible. Thanks, Ben (and Jason Z.)

Release The Hounds (Tortoise & Hare Too)

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Over the last couple of months, we’ve introduced a couple of new demonstration portfolios. We believe the concepts represented are at the core (pun intended) of decades of successful long-term investing.

Core Diem

The first demonstration is squarely centered on the core of our method — selecting the best-of-the-best highest-quality companies when their stock price sets up a favorable/superior return forecast. We select three stocks every day for this portfolio from the top one-tenth of the top percentile of all stocks covered at Manifest Investing. The selection criteria is our MANIFEST rank: a combination of quality rating and projected annual return. The amount invested every day depends on the median projected return for all stocks on the day of selection.

We’ve been quite surprised that the same six stocks have been taking turns since mid-October. Eventually another stock will join the party — and we’ll build out the portfolio to a Top Twenty and manage it from there. This morning we accumulated Coach (COH), Cognizant Technology (CTSH) and Solar Winds (SWI). For now, this is what Core Diem looked like:

Balanced Budget

The second demonstration portfolio — likely the HARE in the opinion of most investors — will utilize the balanced investing concepts centered on preservation of capital and an allowance for non-core (general market securities) investing. The allocation is heavily influenced by the standing recommendation of The Value Line Investment Survey. (See accompanying image) With the median return forecast at 8.8% versus a long-term average of 8.5%, we’ll keep cash equivalents and non-core components near the 35% mid-point — our BUDGET.

The balance will be formed by a common stock component — but not just any old mix.

We’ve often been asked why we don’t simply invest in the Value Line 1700 all-of-the-above collection of individual stocks based on the following image. In a nutshell, a blend of smaller (faster-growing), medium-sized workhorses, and larger (slower-growing blue chip stalwarts) is an impeccably good idea.

The S&P 500 large company entrant — investing equally in the whole 500 — has outperformed the S&P 500 cap-weighted index by 2% per year over the last nine years! This advantage extends and manifests in both of the other groups also, producing the stellar performance of this all-of-the-above blend (^VAY):

How about you? Are you afflicted by a lost decade or two? We think seven decades of avoiding lost decades is worthy of considerable attention and implementation.

We’re toying with the notion that the Guggenheim equally-weighted series is just what the doctor ordered.

Out of the gate, here’s what the Balanced Budget Demonstration Portfolio looks like:

Ladies, Gentlemen, Hounds, Hare and Tortoise, Start your engines!

Standing By The Phone

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Every year in early May, there’s no room at the inns of Omaha.  In fact, there’s probably no vacancy for 500 miles.  When Berkshire Hathaway holds its annual meeting and Graham-and-Doddsville festival, talk turns to succession.  Who’s in line to take over for Warren (and Charlie) when it comes to the Berkshire asset pile?  So I’ve routinely made it a point to stay close to the phone — just in case they dial me up.  I may have gone undrafted for yet another year, but at least this conversation with our son made me smile.

My commitment and focus on making sure that Warren and Charlie knew that I was “standing by” the phone waiting for their succession phone call clouded my judgment and left me vulnerable.

“Uh, Dad. You’re aware that you don’t have to stand by any longer. Your cell phone means that you can go golfing and that phone call from Omaha will still reach you.”

(Uncomfortable silence) “Whoa. You’re right. I guess one day we’ll no longer have that land line.”

“Yeah. We’d hope so. Because even that has a wireless handset.”

(Gulp) “Settle down or I’ll talk about party lines again.”

“No, Dad don’t go there. It’s too horrible.”

“Do you really expect us to believe that the phone calls on Green Acres and Petticoat Junction and that operator named Sarah resembled reality?”

“Well, when Oliver Douglass climbed the phone pole … that was comedy.”

“What’s comedy is that we still have a land line.”

“Watch it. We pay for your cell phone. That can change.”

“Sorry, Dad. At least that old-fashioned phone (shown here) had a hand-held microphone.”

“Uh … that was actually held to your ear. You talked into the thing at the top.”

“You have GOT TO BE KIDDING, right? I feel like we’re walking among dinosaurs. I’m going to go sit in the car and turn on the air conditioner and think about what it’d be like to not have it.”

“Sit in your Buick LeSabre. It won’t take quite as much imagination.”

“Good point. Good thing the windows still roll down.”

Phone-A-Friend

This week, we continue to build out our perspective on long-term performance relative to the stock market over, in some cases, decades. As a refresher, we’re assuming first name basis with Peter (Lynch), Warren (Buffett & Berkshire), Walter (Schloss) and honoring their long-term achievements. We let Ken Heebner keep his last name because it’s cool … we like to “Heebner” our portfolios.

As expected, the random sampling of rhino funds (red, institutional portfolios) continue to fill in — with the majority now landing close to zero or below, signaling failure to beat the S&P 500 over the periods shown. (“Bill” is Legg Mason Value — famous for his 15-year outperformance winning streak from 1991-2005)

Speaking of winning streaks and “phoning friends” we continue to watch for people (and rhinos) who seem to know what they’re doing. In this case, we cite Eddy Elfenbein (http://www.crossingwallstreet.com) and his current 5-year winning streak of outperforming the market. Another noteworthy source of reliable ideas is Jim Jubak and http://jubakpicks.com and the level of out performance shown here. Both Eddy and Jim are hovering at lofty levels and should be regarded as a source of worthy ideas for future stock studies.

The Challenge Club is no slouch either. Join us [for the monthly webcasts] as we continue this quest/discovery of market out performance that started back in 1999.

Performance excellence 20120514

Market Mystery Solved!

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As the year winds down — and we get this blog launched — we’ll be going back to a number of our favorites, a few oldies-but-goodies.  Some will share fodder for investment-related and life-related pondering.  Others will convey research methods and findings, but they’re all intended to help you (particularly if you’re new to Manifest Investing) to get to know us better.  This was written after attending a Martina McBride concert this summer — and it’s clear that the stock market does behave very much like a teenage daughter, sometimes.

Benjamin Graham had it all wrong.

I’ll let that heresy sink in for a minute.

I ain’t complainin’, but I’m tired.
So I’m just sayin’ what I think.
And if we’re being honest,
Then honestly I think [we all] need a drink.

Graham — hailed as the father of fundamental analysis and value investing — often used a characterization for the stock market by referring to it as Mr. Market.

Graham’s favorite allegory is that of Mr. Market, a fellow who turns up every day at the stock holder’s door offering to buy or sell his shares at a different price. Rarely, the price quoted by Mr. Market seems plausible, but most of the time it is ridiculous. The investor is free to either agree with his quoted price and trade with him, or to ignore him completely. Mr. Market doesn’t mind this, and will be back the following day to quote another price. The point is that the investor should not regard the whims of Mr. Market as determining the value of the shares that the investor owns. He should profit from market folly rather than participate in it. The investor is best off concentrating on the real life performance of his companies and receiving dividends, rather than being too concerned with Mr. Market’s often irrational behavior. [Wikipedia]

That’s all well and good — but wrong. There’s nothing about the vagaries of following a “Mr. Market” and the peaks and valleys of a male-based gender emotional excursion that could fully explain overall market tendencies.

And that’s where Martina McBride has one over on Ben. Because the market is a teenage daughter.

Eddy’s Guide to Cliff Diving

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I think it’s a symptom or manifestation of perceived attention spans these days. The 365.25/24/7 news cycle has led to a sound bite-ification all around us.

And to me, the fiscal cliff is the latest example.

We face a number of challenges in this country (and all across this planet.) They’re real and they don’t get any better in ostrich imitation mode. That’s part of the problem with the fiscal cliff.

1. It’s self-inflicted.
2. There’s a chance it’s a form of choreographic license.
3. It seems like we can’t get anything done without creating/imagining a crisis.

And that’s a large part of the problem. Effective management often includes the recognition of pending challenges and developing threats. And it’s done best when at least part of the challenges are anticipated and averted. When it takes a crisis to get anything done, it’s pretty clear that none of the parties involved are very good at what they’re supposed to be doing.

During our educational sessions this past weekend, a number of people mentioned the fiscal cliff. In other conversations, we talked about and yearned for days of yore when people like Louis Rukeyser put things in context — and in most cases, provided solid reminders about long-term perspectives. From this vantage, challenges can often become much more manageable and understood.

Regular readers know that we’ve mentioned the virtues of one Eddy Elfenbein on these pages before. Eddy writes a blog, Crossing Wall Street.

Eddy’s message from November 30, 2012 is particularly helpful as we debate the fiscal cliff and try to come to a better understanding. See: “Don’t Fall For The Fiscal Cliff Hype.” For more, check out a recent post by Barry Ritholtz on the same subject: Fiscal Cliff: Much Ado About Little I don’t know who “today’s Rukeyser” is … but Eddy (and Barry) are steadying and thoughtful voices — with the aforementioned focus on the long term.

Jos. A. Bank. (JOSB): Buy One, Get a Cell Phone & A Ginsu Knife

In his 11/30/2012 narrative, Eddy questions the ability of Jos. A Banks (JOSB) to be successful when they seem to be giving out not just the kitchen sink, but the bathroom sink, a couple of hoses, a cell phone and a sack full of ginsu knives with the purchase of every suit these days. He is not alone in his skepticism.

The stock price has dropped from $55 to the low $40s recently.

The Value Line low total return forecast checks in at 8.5% — and we build a return forecast of 11.8% based on a sales growth forecast of 10% and a net margin approaching 10% also. We’re using a projected average P/E of 12×.

Here’s a look at the business model analysis:

I think margin compression has an uncomfortably high probability — and this probably has a lot to do with the preliminary bearish rating on JOSB at stockcharts.com (PnF). And if that materializes the EPS trend/forecast will be impacted. The price has tracked a little above the earnings trend shown in the visual analysis … and it’s feasible to expect something not dramatically different from the $60-90 price range suggested by Value Line.

It doesn’t matter if Eddy is a modern day Rukeyser (yet). He certainly belongs in the club.

Lincoln: Reminder to Read. Rinse. Repeat.

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“Investment in knowledge pays the best interest.” — Abraham Lincoln

This Thanksgiving season, I was intrigued by a few conversations that covered the complete spectrum of the investing experience.

One discussion revolved around getting started. The individual happens to be stationed in Afghanistan with some time on his hands and is wrestling with where to start. I believe I convinced him that he was already ahead of the challenge. Why? Because he’d already begun imitating a sponge — absorbing everything that he could get his hands/eyes on. Read. Rinse. Repeat.

http://www.fool.com is a valuable resource for getting started and referred him to their broker smorgasbord and commentary on how to choose one.

The second discussion involved someone very close to me who is now actively funding a 403(b) and is giddy about the potential. We look forward to watching the account balance grow in much the same way that Tin Cup (our retirement plan model portfolio) continues to entertain us.

The third is actually a blend of a couple of separate conversations. One long-time subscriber called me to let me know that she’d no longer be subscribing. She’s 80 years old, for one thing. But she wished us well … a joyous holiday season … and then gave us an early Christmas present. “God bless you and your family and all of the Manifest Investing staff and community. It’s not that I’m not investing anymore — but I have reached ‘critical mass’ and I really want to thank you. I have a collection of high-quality stocks at Fidelity and Ameritrade … but I’ve reached the point where you’ve taught me how to watch them — and even more importantly, because of what I’ve learned, I have no trouble sleeping at night. In fact, I’ve slept well for a long time. Thank you.”

No. Thank you.

We’re humbled and grateful.

My wife and I and my parents went to see Lincoln this weekend. (1) Daniel Day-Lewis clearly knocks it out of the park and will be nominated for an Oscar, and is a likely winner. (2) If you’re going to see the movie, I’d recommend googling or spending a few moments with Wikipedia and the setting, characters and situation surrounding the passage of the 13th amendment. Tommy Lee Jones as Thaddeus Stevens is also worth the price of admission and a true courageous pioneer. (3) If you believe that partisan rancor and disagreement is something new on Capitol Hill, you’re wrong. Go see the movie.

Read. Rinse. Repeat.

Lincoln was voracious reader. There’s also a poignant scene in the movie where Lincoln urges simplicity while pondering a major decision. He shares “Occam’s Razor according to Euclid” with a youthful engineer and the telegraph operator, a powerful reminder that sometimes the best solutions are the glaringly simple.

And from a couple of young people getting started to a group of experienced long-term investing advocates who sleep pretty well at night, we’re grateful for the reminder.

And the optimism about what the future holds.

“I am a firm believer in the people. If given the truth, they can be depended on to meet any national crisis. The great point is to bring them the real facts — and some beer.” — Abraham Lincoln