Value Investing in the Sweet Spot – William Smead

Featuring William Smead

With a long and successful track record in markets and a passion for investing, Bill Smead of Smead Capital Management outlines his process in a high energy Think Piece. Bill brings together the threads of demographics and time horizons to find the sweet spot between mean reversion and the best part of the bell curve, with stock tips for an unequal society and the anticipated wave of inter-country migration.

Published on
16 January, 2017
Topic
US Economy, Micro, Sentiment
Duration
39 minutes
Asset class
Equities, Real Estate
Rating
63

Comments

  • DC

    Darrell C.

    28 7 2017 07:15

    0       0

    Less labor to build a house? Only if robotics can run electrical wires, copper plumbing, install toilets, lay flooring..... etc...

  • HK

    H K.

    6 7 2017 14:49

    0       0

    If your kids have no background in computer programming it really will be the equivalent of not learning how to read in this century and century before.

    Home building will not take nearly the amount of labor in the past due to technology breakthroughs especially in 3D printing and in the time frame he mapped out.

    Interesting interview nonetheless...

  • RO

    Robert O.

    19 2 2017 02:16

    0       0

    What if the home buyers that he is counting on choose renting to maintain optionality? He is making the assumption that this next generation has the same priorities and wants that his generation had. Past performance does not guarantee future gains. His view of energy appears too simple given the other recent discussions on Real Vision. And lastly his bank investments probably assumes that another GFC does not take place. It wasn't that long ago that you could buy BofA at $3 or $4 dollars and flip the stock for 50% gain in a few days or weeks.

  • JF

    Jennifer F.

    1 2 2017 12:55

    0       0

    Not sure his demographics quotes are exact . But I agree that parents, deriving very little on their income, may help their kids. That is assuming we don't have another GFC that wipes out the boomers savings.
    But i like his idea on investing in things people are addicted to.

    Can we get Jim Rickards on. I have just read a few of his books.

  • WM

    William M.

    29 1 2017 15:02

    4       0

    Not convinced by his house building enthusiasm. Opportunities for good salaries that existed in the 70s are not there today. Student debt represents a drag on further debt accumulation. The social security and medicare spending bust is upon us. Interest rates are turning up and weak companies are going to go under in droves. The psychology of the nation is turning negative and the threats to growth are legion. I see a lot of positive comments from viewers, and the guy is enthusiastic and entertaining, but its all too evangelical for me.

  • NG

    Nitin G.

    21 1 2017 23:35

    4       0

    Enjoyed his interview. Although many have argued viewing Amazon from a gross profit dollar perspective considering it invests heavily. Until now, for a lot of people it was cool to shop on Amazon as distinction between high income and low income faded away in online retailing. But now these low income shoppers are in fact beginning to realize how their livelihoods are taking a hit. When the next recession hits, sales growth at Amazon is poised to take a significant hit and that's exactly when street wakes up from the reality eventually sales growth slows.

    One should ask yourself can Amazon continue to grow perennially at such a pace. If there's so much consumer stickiness why continue to invest that heavily .

    Mr. Bezos knows he needs growth narrative alive.

  • NH

    Neil H.

    20 1 2017 21:32

    9       0

    With 40 percent of millennials still living at home and many paying off student debt, he may be a little early for buying homebuilders

  • PS

    Paul S.

    20 1 2017 02:33

    10       0

    The assumption that people are transitioning to 2 kids, a mortgage and 'local news' is a stretch

  • Jc

    Justin c.

    19 1 2017 19:31

    5       0

    I thought the housing dynamic was one of major oversupply as boomers die off. Sure they retire at 55 and live in their house until 70+, but aren't there going to be more 70 year olds per year than 35 before too long? And once that starts it will happen year after year after year. i could be wrong on that.

  • CM

    Carl M.

    19 1 2017 16:01

    5       0

    I went to the U.S. census website to do some fact checking. I suggest others do the same. I don't see the Tsunami in the data. That being said, you gotta love his enthusiasm.

  • MB

    Martin B.

    19 1 2017 07:40

    8       0

    The interview has two parts. .
    The first part was a real disappointment. In my former life I was a mutual fund analyst and interviewed over 50 managers a year. He is very passionate about value investing which is nice. But we all know why value works etc. and I sometimes had the impression that I'm listening to a preacher instead of teacher. You really saw that when he talks about Amazon. There are brilliant minds like Bill Miller who buys this stock as a value investment AND can explain in detail why. I was really disappointed when I look up his fund holdings. Berkshire Hathaway was a top holding. I don't say that it can't be a value stock. My point is that BH is like a fund itself and can therefore be hold by an investor separately. I would expect him to find other great value investments. And here comes the next disappointment: one of the big holdings is American Express which is already included in BH.
    The second part about demographics was very well explained and shows his ability to see the bigger picture. I don't share his view about computer science students.
    Overall I was very disappointed. I compare it to the managers I met. Therefore I'm may be a little harder on the verdict than other people here.

  • dd

    darrell d.

    18 1 2017 20:34

    2       0

    Wow .. totally a different take on things. Never gave the issue much though. Great ideas to start digging into the demographics ... besides baby boomers.

  • LM

    Lars M.

    18 1 2017 13:28

    1       0

    Parent-funding has become the norm here in Norway at least. More or less double digit price increases every year for twenty years, and millenials can't afford the downpayment (or higher interest rates). So his theory on that has merit.

  • NR

    Nuno R.

    18 1 2017 08:50

    2       0

    Brilliant.

  • DS

    David S.

    18 1 2017 04:15

    5       1

    So much actionable info here, a really fun interview too, get this guy signed up for his next interview in 3-6 months.

  • NA

    Nasser A.

    18 1 2017 01:14

    5       9

    wtf is this

  • WP

    William P.

    18 1 2017 00:40

    1       5

    This seemed more like an extemporaneous monologue than a coherent think piece.

  • AH

    Andreas H.

    17 1 2017 20:44

    1       1

    Perfect! Super!

  • DB

    Devon B.

    17 1 2017 19:57

    7       1

    Now that is a passionate gentleman.

  • AD

    Anthony D.

    17 1 2017 19:33

    5       1

    I am continually amazed how RV can produce, out of left field, such "unknown" but thoughtful, dare I say brilliant people. I don't agree with all his points. For instance: How can you possible know the "value" of a bank these days, let alone BAC. But even so, this presentation makes me think of a piece of music by Aaron Copland.. I call it "genius for the common man"

  • JV

    Jens V.

    17 1 2017 13:31

    4       0

    Just awesome.

  • SS

    Sam S.

    17 1 2017 13:23

    6       0

    Sounds like life is coming full circle. I grew up with real estate, real assets, things that mean something but have been living with the opposite for many years. I can't wait for the real world to return. I believe there will be a huge correction in some form or fashion, opportunity will be knocking in a big way. Can't make the transition without pain to the un-real world of today. "Real" Vision TV is real world and this episode hits the nail on the head. Love it. Thank you.

  • AD

    Anton D.

    17 1 2017 10:25

    5       0

    This greatest inter-country migration he talks about at 15 min mark- what States/cities in the US are going to be beneficiaries? Did I miss it or did he not say?

  • IZ

    Ileana Z.

    17 1 2017 06:13

    11       1

    i have been waiting for my 25-29 year olds to get married so i can bribe them back close to home with a house down payment. this guy is absolutely correct on that one!

  • CM

    Carl M.

    17 1 2017 05:36

    6       0

    I have been shopping for a home in the Los Angeles area for the last eighteen months and have witnessed what the gentleman describes here on numerous occasions. Young families are indeed house hunting with their parents. WOW !! I guess will have to reconsider my pessimistic view on real estate valuations.

  • JK

    Jeff K.

    17 1 2017 04:41

    5       0

    LOVE this guy!

  • TP

    Trevor P.

    17 1 2017 04:32

    7       0

    I had no problem staying awake listening to this gentleman!! Excellent speaker with excellent content! Bring him back anytime!

  • AH

    Aaron H.

    17 1 2017 04:21

    7       0

    Love this guy! Bill's passion is contagious. Enjoyed his candor. Bring him back.

  • CA

    Craig A.

    17 1 2017 02:40

    5       0

    Neil Howe and Harry Dent might have a different opinion on the demographics with housing in the next five years?

  • SL

    Steven L.

    17 1 2017 02:27

    10       0

    Based on his hyperactivity, I'm guessing he's a good Starbucks customer. This is probably the 3rd presentation that mentioned the Millennial tsunami that's about to hit. I'm a boomer who has recently noticed a LOT of Millennial couples I interact with are pregnant. Just sayin'.

  • DD

    Derek D.

    17 1 2017 02:23

    8       1

    I freaking love this guy. You meet up for a beer and start talking shop and suddenly the waitresses are in your lap and you're closing the bar down.

  • SD

    Stephen D.

    17 1 2017 02:16

    3       0

    AMZN might make $4.50 this year, who wouldn't want to pay $817 for that? It took them a mere 20 years to get to a place where they could break even. But if I laid all the people burned shorting AMZN end to end it would stretch for 100 miles. Value investing is a tough discipline.

  • SC

    Sajad C.

    17 1 2017 01:31

    1       0

    Makes good points for value investing.

  • RV

    Richard V.

    17 1 2017 00:38

    3       0

    Thought provoking! Demographics is so important. Maybe Harry Dent would be a good interview?

  • RP

    Ron P.

    17 1 2017 00:13

    7       0

    This is uncommon common sence investing

  • GB

    Grant B.

    16 1 2017 23:14

    3       0

    I enjoyed this. Nice to hear some themes from a long only guy. Real Vision has had this in awhile.

  • GC

    Grant C.

    16 1 2017 22:32

    5       0

    Entertaining. Valid point raised about investment time frames, most people don't have the patience or mindset for the long term and want to get rich ASAP.

  • AG

    Alex G.

    16 1 2017 22:32

    4       0

    Sometimes RV is good for some real characters. Nonetheless, this was very informative.

  • GA

    Giedrius A.

    16 1 2017 22:04

    7       2

    Very passionate person talking about value investing, that's what we need all the time!!!

  • JC

    John C.

    16 1 2017 21:50

    4       1

    loved it!

  • JS

    Jonathan S.

    16 1 2017 20:26

    15       0

    Loved it! He made me laugh and he really made me think. Get him back soon.

  • IA

    Ibrahim A.

    16 1 2017 20:12

    5       0

    So entertaining. I need to meet him in person!

  • NG

    Nicolas G.

    16 1 2017 19:55

    2       0

    @Enrico F. Lol :b

  • NG

    Nicolas G.

    16 1 2017 19:53

    7       0

    I really liked it. Good to hear some old-school common-sense investment facts between so much macro-sophistication. Loved the energy and the positivism. Thanks RV!!!

  • AC

    Arthur C.

    16 1 2017 19:18

    11       0

    Nothing beats informed enthusiasm! This is one of your better shows...little stage drama, just great thoughts presented with passion.

    Art C

  • RM

    Richard M.

    16 1 2017 18:58

    6       0

    Highly amusing and entertaining (and also very enlightening) - really enjoyed this!

  • PS

    Patrick S.

    16 1 2017 18:57

    5       0

    Now that was fun.

  • EF

    E F.

    16 1 2017 18:40

    6       4

    the best thing you can own is a company where your customers are addicted? nice 1, good thing you go to church pretty often

  • RM

    R M.

    16 1 2017 18:26

    12       0

    What I very much enjoy about RVTV is 1) The diversity of opinion 2) The time you give folks to make their argument
    Well done!

  • DG

    Daniel G.

    16 1 2017 18:17

    34       0

    How could he just dismiss the student loan debt problem? They're already making a mortgage payment, they just don't have the house!

  • JS

    James S.

    16 1 2017 18:13

    7       0

    I loved the high energy nature of this piece, thanks! The last point regarding baby boomers handing cash to grandchildren entering the property market seems, in my experience at least, to already be happening where I am from. The demographics perspective gave a lot of food for thought, thanks again.

  • RS

    Rick S.

    16 1 2017 17:19

    3       0

    I enjoyed the demographic perspective as it relates to financial markets. Thank you.

  • BL

    Bruce L.

    16 1 2017 16:59

    3       0

    Really enjoyed this interview. Very non-consensus and positive as well.