1Q21 Commentary
ESG: A Data-Driven Definition
A company is not creditworthy if it is behaving in a way that is not long-term sustainable for its business. Especially within credit, every company is dependent on its access to capital markets. If a management team puts future capital raising at risk because it behaves irresponsibly and sets the stage for unexpected liabilities down the road, we believe that is likely to be disqualifying behavior. In this way, we don’t view success as a binary battle between “good” vs. “bad.” We define success the same way we always have as fundamental investors – mitigating risk without compromising performance.
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4Q20 Commentary
Just Because You Can Doesn’t Mean You Should
Everywhere we turn, we seem to be faced with behavior which models: If you can get away with it, you should do it. This amoral acorn doesn’t fall far from the Machiavellian oak tree, which extolls that the ends justify the means. Moreover, we don’t just see this behavior modeled; it seems to be deliberate much of the time. While there are investors who send this “win at all costs” message to their managers intentionally, we believe the conventional wisdoms and traditional methods of asset allocation may be inadvertently and erroneously making this a rule of the markets. The hardest thing for a manager to do in today’s investing environment is to stay disciplined. This discussion is for that subset of investors who care about risk and reward.
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3Q20 Commentary
History in the Making
Can we learn from history? Or has the past just set the table for what’s to come? Is the future determined by the past? Or are the two unrelated? We suggest that the answer to all of these questions is yes.
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2Q20 Commentary
Tailored Brands: A Casualty of Covid
Retail companies don’t usually find themselves in the advantageous liquidity position that Tailored Brands, the largest specialty menswear retailer in the United States, had at the start of 2020. Then COVID-19 changed everything in an instant. What follows is a transparent and open reflection of this specific situation; what we have learned so far; and how we are thinking about and positioning in the current environment.
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Quarterly Commentary Archive
- 1Q2020: What Happened To Zeo?
- 4Q2019: Robbing 2020 To Pay 2019: A Reality Check For Fixed Income
- 3Q2019: Apparently, Hope Is A Strategy
- 2Q2019: The Intoxicating Rush of a High-Flying Market
- 1Q2019: Redefining Outperformance in Fixed Income | Creditworthiness + Volatility Mitigation = Risk-Adjusted Returns
- 4Q2018: Will You Even Notice When the Tide Goes Out? | Better Lucky Than Skillful? Are You Sure About That? | Rating Risk and Risky Ratings
- 3Q2018: Rising Credit Spreads Won’t Sink All Boats | Covenant Lite: Yields Great, Less (Ful)Filling
- 2Q2018: Are ETFs Dumbing Down the Bond Market? | The Most Important Success Metrics You Aren’t Using | A New Alphabet for the Fed-Watching Set
- 1Q2018: Be an Intentional Investor | Nonsense Masquerading as Foolishness Undermining Discipline | BREAKING NEWS: Bank Loans Just Got Riskier
- 4Q2017: Running With The Bulls Can Get You Trampled | Bank Loan Funds: You Are What You Eat | Short-Term Bond Funds: This Rose By Any Other Name Would Be Something Else
- 3Q2017: Myth #1: Low Volatility Is Here To Stay | Myth #2: Market Timing is Easy | Myth #3: Mutual Funds Should Have Low Fees
- 2Q2017: Logic Puzzles | But Is It Worth The Effort? | What Really Matters Anyway?
- 1Q2017: Chute! Chute? Shoot. | Forget the Cookie Jar – It’s the Pies You Should Avoid | Not All Ladders Go Up
- 4Q2016: Why? | “Brilliantly Simple” | What Does It Mean to “Risk-Adjust” Returns?
- 3Q2016: Discover Your Inner Skeptic | The Danger of False Choices | The More Things Stay the Same, The More They Change
- 2Q2016: Mind the Gap | Buyers Beware | With Great Milestones Comes Great Responsibility
- 1Q2016: Trading Investing in Fixed Income | The Risk Less Traveled | Avoid Becoming a Fashion Victim
- 4Q2015: Holy Backfire, Batman! | Comparing Apples to Oranges | Aren’t We Supposed to Buy Low?
- 3Q2015: What is Liquidity? | The Hidden Cost of Perceived Liquidity | The Importance of Fit
- 2Q2015: Our First Quarterly Letter | Saying “No” to Good Companies | Our Approach to Volatile Markets
