Albert Bridge Capital

Faith

The importance of "faith" when diagnosing investor behavior, including our own.

Drew Chats with Matt Zeigler at The Intentional Investor and Epsilon Theory YouTube Channel

In the importance of culture, critique, and civility; and the impact some pretty impressive folks had on yours truly.

The Analyst's Code

There is no holy grail of investing, but there is a recipe for getting close...

Volkswagen and Porsche SE are stuck in Wall Street’s pits. Stock investors, start your engines.

In our view, Porsche SE, with a recent 14 billion euro market cap (and trading over €40 billion a day), is one of the most underpriced, liquid, listed assets available to investors.

Drew Chats with Downtown Josh Brown

The impact of flows on security pricing, and investment opportunities.

Drew Chats with Meb Faber

Navigating Behavioral Biases, U.S. vs. European Stocks, & Tesla‍

Pods, Passive Flows, and Punters

The impact of pods, passive investment, and retail investors on security pricing.

Stock Market History Illuminated, 2023 Style

An illuminating color-coded infographic showing the distribution of US stock market returns by decade and annually for a long, long, time.

The Albert Bridge Factory

Define your process, and follow it, but don't completely ignore the regime we are in.

Stock Market History, Illuminated, 2022 Style

I’ve been keeping a graphic of the long-term performance of the US stock market for many years now, and I’ve been sharing this information in the histogram below. I think it does a reasonable job of revealing how long-term returns are manufactured and the tilts over time. I’ve color-chunked the data by decade to highlight decades of historical weakness as well as periods of strength. I’ve also added additional tables and charts which I think are interesting, and in some cases, stunning.

What Stands in the Way Becomes the Way

I don’t think that Aurelius, Frost or Zweig would disagree that the road less traveled might have a little more alpha in it.

For Investors, a "Never-Sell" Mantra is a Song for Fools

On the misleading claims of Hendrik Bessembinder about diversification; and the convenient, post-hoc, and the spurious conclusion to always buy and hold.

A Conversation between Drew Dickson and Morgan Housel

A discussion between Drew Dickson of Albert Bridge Capital, Morgan Housel of The Collaborative Fund; moderated by Jamie Catherwood of O'Shaughnessy Asset Management

Conversation with Dr. Daniel Crosby on his Standard Deviations Podcast

Drew joins Dr. Daniel Crosby on the Standard Deviations podcast.

On the Disincentives of Investing in Public vs. Private Equity; and Implications for Pricing and Returns

Just as the public markets can be affected by short term flows, is it possible that private market valuations, and the periodic marks of particular private investments, have been affected by increasing allocation tilts toward private equity?

Why European Stocks Might Win

In an op-ed for Marketwatch, Drew explodes the myth about European companies, and reveals where he thinks the opportunities are today.

Finding Alpha in Europe

Drew and Toby chat about narrative-driven investing, Ben Graham's voting machine, behavioral explanations for stock mispricing, and managing a concentrated portfolio of investment ideas.

Sell in May and Go Away?

Turns out there may actually be something to the old Sell in May and Go Away adage - at least over the last 80+ years.

If Growth Stocks Sell Off Will They Bring Value Stocks Down with Them?

Growth stocks crushed just about everything from 2017 through 2021. Not that they necessarily will, but if they do give back some or all of their gains, given their weightings, times will be tough for broader indices. But what about the value names within them, will they sell off in sympathy as well? Of course no one knows, including ourselves, but we take a quick look at behavior of value names as the tech bubble sold off from 2000 through 2002. This example may be worth some consideration.

Stock Market History, Illuminated

Some year-end charts and tables asking some big questions about what comes next.

Which One Are You?

So, if you are in the taxi, what is your first move (and you can’t say “do nothing”). Are you trimming or adding?

Just How Cheap is Europe vs. the US, and Should it Be?

As it turns out, it isn’t that the people are paying a bigger growth premium for US Growth over European Growth; but instead it is that people are paying a (much) bigger multiple for US Value than for European Value.

Are American Companies Better than European Ones?

If we again go back and start the clock on January 1, 1980, and stop it thirty years later on December 31, 2009, we see that the S&P 500 generated annual total returns (with dividends) of 11.5%. During that exact same period, guess what the annual returns of the MSCI Europe were? Also 11.5%. This last decade, however, things have gotten out of whack.

Rumpelstiltskin and Meme Stock Investing

“What sort of sorcery is this?” Is this financial alchemy powering a perpetual motion engine that will result in higher and higher share prices?

Archegos, Disclosure, and Price Discovery

This had a lot to do with bad banking, but most to do with an overzealous client. Meanwhile, it had very little to do with holdings disclosure. Sure, our kneejerk reaction is (always) for more regulation, because we want to believe that some regulatory response will immediately solve all our future problems. But we should question this intuition.

A Memo to Investors

I know, these are weird and trying times. It all makes you wonder what the point of stock-picking is. What is the purpose of kicking the tires, looking under the hood, and doing our jobs?

Investors? Possibly you!

FATMAN-G. No, that isn’t my rap name, although vaguely appropriate (I mean, the G part of course). That’s our new moniker for the Avengers[1] of the equity capital markets, to which we have now added Tesla. FATMAN-G is Facebook, Amazon, Tesla, Microsoft, Apple, Netflix, and Google.

Avengers Assemble!

Amazon is, very simply, a tremendous company. Google is also a tremendous company. The same goes for Microsoft, Apple, Netflix, and Facebook. These are the superheroes of capital markets. In these FAMANG stocks, the Avengers have assembled.

Cue the Camouflage

The S&P 500 is up 6.5% this year. That’s a total return number, and given what is going on out there, it’s pretty impressive.

The Times that Try Stock-Pickers’ Souls

On first principles, there is one way to generate excess stock market returns over the long term, and it isn’t to “own winners at any price.”

Grandpa Stocks

There are young companies out there that are exciting, growing quickly, and very clearly have the world in front of them.

Bubblicious?

COVID-19 and related counteractive policies have had an extremely negative impact on domestic and global economies. Whether or not you believe that the policies weren’t strong enough, or if they were overzealous, we are where we are.

On Negative Oil and Futures Prices

A quick and basic primer on spot oil prices and oil futures, and the difference between the two.

In Flew Enza

World War I began in 1914, and the US declared they would join the fight in April of 1917.

COVID-19 and Equity Markets

My wife’s family is from Tuscany, and Italian is her first language. Four years ago, she wanted to get out of London for the summer, and headed over to Italy with the kids. But instead of visiting her cousins, aunts, and uncles in Florence, she chose instead to spend 40 days in Venice.

Regulators to the Rescue?

Market authorities across many European countries have announced plans to prohibit short-selling (to varying degrees) for the foreseeable future.

Perspective

I started an investment club in college with $100. I had seven buddies that also saved $100, so we had $800 all-in.

Not a Bad Decade

Closing the book on a decade of equity returns.

Finance

On the Impact of the FAMANGs

Market headlines, globally, have been dominated by the storied performance of a select few transformational, winner-take-all business models.

Alternative Funds

Europe vs the US: Is it all about sector exposures?

In America’s Decade, we highlighted the very similar returns provided by the MSCI Europe and S&P 500 from 1980 through 2009, and the very different returns since.

Finance

America’s Decade

When it comes to predicting the economy, we believe that speculating when things will turn is an exercise in futility and a horrible waste of time; one which meanwhile distracts us all from the task at hand.

Finance

Prediction, Publicity, and Paul the Octopus

Unlike many other market observers, we just don’t see the point in discussing or debating the macroeconomics driving overall markets, volatility, or sentiment.

The Sacrilegious Diaries: Measuring the Impact of Portfolio Turnover

A few weeks ago, we discussed the potential benefits of portfolio and name turnover.

Imagine No Inflation

Many folks have now listened to this fascinating interview of the pseudonymous Jesse Livermore by Patrick O’Shaughnessy.

I’m Volatility?

Is risk “volatility vs. a benchmark” or is risk “the potential permanent loss of capital”?

When You Can’t Wait For Tomorrow

We’re mulling this morning over what it is that makes stock prices, and stock-picking, work.

Peak “Peak Car” ?

Disruption in the auto industry is a very hot topic.

The Right Way

We wanted to quickly highlight that the difference between the fee structure of a large, diversified, purportedly active fund and a smaller, concentrated, active fund.

The First Step to Regaining Credibility

As equity indices romped higher throughout most of the last ten years, the long-short hedge fund industry increasingly came under attack.

The Futility of Market Timing

We are not big fans of market timing. Those that profess to have such a skill before the fact often always turn out not to have had much skill in hindsight.

Visualizing the Arithmetic of Active Management

It’s been said that a picture can be worth a thousand words.

123 Years of the Dow

Presented without comment.

Sweet Emotion?

No matter what we pretend to ourselves, even for those of us with more than ten years of investing experience, this move is painful.

Share Buybacks, Bad Companies, and Bear Markets

The star has fallen for a few companies out there, and for those that had previous share buyback programs, there have been some of the predictable “see I told you so” articles written about them.

Keeping Calm and Carrying On

October unleashed a storm upon financial markets.

Reminiscences of a Stock Operator: The Volkswagen Chronicles, Ten Years Later

In the spring of 2008, things were already wacky at Volkswagen.

The Mathematics of Maintaining Bet Size

We aren’t big fans of dipping our toes in the water when entering a position, nor of timidly reducing when exiting.

On Sexual Chocolate and Semi-Annual Reporting

The presupposition that quarterly earnings and guidance somehow breeds short-termism and suboptimal business strategy,

Build a Bear?

Imagine every adult has 10% of their savings invested in “the global stock market”,

Data Science and Alpha

As the investment community embraces data science, we should not be blind to the reality that many of our active-management peers are

Hunting for Alpha

But Can a Stock-Picker Really Generate Alpha, and is it Luck or Skill When it Happens?

Career Risk, Alpha, and Contrarian Investing

At our firm, one of our main goals is, very simply, to generate excess returns from equity investing without taking commensurate risks.

God Bless the Shorts

Elon Musk made a lot of news last week, refusing to answer “boneheaded” questions from “boring” sell-side analysts.

Horses and Stocks

Bet With The Best, Chapter 3: Crist on Value

Unwarrented

Evidently, the closest thing we in financial markets have to Albert Einstein or Winston Churchill, is Warren Buffett.

Fooled by Non-Randomness

Students of decision-making and bias will all have seen the work by Cornell psychologist Tom Gilovich,

122 year Dow Jones Histogram: Putting 2017 into context

2017 was a pretty good year for the stock market. The 19th best since the Dow Jones Average was introduced in 1896.

Pegs, P/E'S and the Value Premium

The notion that the PEG is a linear tool for valuation is a myth, and a deeper analysis of its function reveals that the difference in outperformance of growth stocks over value stocks accelerates as interest rates drop toward zero.

The Voting Machine

It all started for me over 30 years ago.

Drew's Views

Markets

Faith

Drew Chats with Matt Zeigler at The Intentional Investor and Epsilon Theory YouTube Channel

The Analyst's Code

Volkswagen and Porsche SE are stuck in Wall Street’s pits. Stock investors, start your engines.

Drew Chats with Downtown Josh Brown

Drew Chats with Meb Faber

Pods, Passive Flows, and Punters

Stock Market History Illuminated, 2023 Style

The Albert Bridge Factory

Stock Market History, Illuminated, 2022 Style

What Stands in the Way Becomes the Way

For Investors, a "Never-Sell" Mantra is a Song for Fools

A Conversation between Drew Dickson and Morgan Housel

Conversation with Dr. Daniel Crosby on his Standard Deviations Podcast

On the Disincentives of Investing in Public vs. Private Equity; and Implications for Pricing and Returns

Why European Stocks Might Win

Finding Alpha in Europe

Sell in May and Go Away?

If Growth Stocks Sell Off Will They Bring Value Stocks Down with Them?

Stock Market History, Illuminated

Which One Are You?

Just How Cheap is Europe vs. the US, and Should it Be?

Are American Companies Better than European Ones?

Rumpelstiltskin and Meme Stock Investing

Archegos, Disclosure, and Price Discovery

A Memo to Investors

Investors? Possibly you!

Avengers Assemble!

Cue the Camouflage

The Times that Try Stock-Pickers’ Souls

Grandpa Stocks

Bubblicious?

On Negative Oil and Futures Prices

In Flew Enza

COVID-19 and Equity Markets

Regulators to the Rescue?

Perspective

Not a Bad Decade

Finance

On the Impact of the FAMANGs

Alternative Funds

Europe vs the US: Is it all about sector exposures?

Finance

America’s Decade

Finance

Prediction, Publicity, and Paul the Octopus

The Sacrilegious Diaries: Measuring the Impact of Portfolio Turnover

Imagine No Inflation

I’m Volatility?

When You Can’t Wait For Tomorrow

Peak “Peak Car” ?

The Right Way

The First Step to Regaining Credibility

The Futility of Market Timing

Visualizing the Arithmetic of Active Management

123 Years of the Dow

Sweet Emotion?

Share Buybacks, Bad Companies, and Bear Markets

Keeping Calm and Carrying On

Reminiscences of a Stock Operator: The Volkswagen Chronicles, Ten Years Later

The Mathematics of Maintaining Bet Size

On Sexual Chocolate and Semi-Annual Reporting

Build a Bear?

Data Science and Alpha

Hunting for Alpha

Career Risk, Alpha, and Contrarian Investing

God Bless the Shorts

Horses and Stocks

Unwarrented

Fooled by Non-Randomness

122 year Dow Jones Histogram: Putting 2017 into context

Pegs, P/E'S and the Value Premium

The Voting Machine

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