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It’s an excellent company whose future is bright. Unfortunately, bulls are massively exaggerating – and thus considerably overvaluing – it. BHP Group (hereafter “BHP”) is the world’s largest (by market capitalisation) mining company; by the same metric, it’s also Australia’s biggest corporation. It’s hardly certain, but it’s probably not controversial: its outlook is … [Read more...] about BHP’s greatly overvalued because copper’s been hugely overhyped

Rising yields are usually unimportant. In sharp contrast, valuations are always crucial. Australian and value stocks abate this major risk. In The Market is obsessed with the wrong things (25 March), Chris Conway wrote: “markets obsess over war and oil, but interest rates drive outcomes. Understand (central banks’) policy, and you understand the path of markets.” That, he … [Read more...] about High valuations – not rising bond yields – threaten American stocks

I’ve previously shown why value stocks excel; I now show why value ETFs don’t – and also why factor, sector and thematic ETFs are toxic. Over the past few months, I’ve demonstrated that value stocks greatly outperform “momentum” stocks (for details, see Why value investing crushes momentum speculation, 9 February); value also thrashes “growth” (Want to shrink your … [Read more...] about Why “value” ETFs underperform – and most ETFs are poison

Over the past decade they’ve become globally significant E&Ps. Their costs have fallen and productivity’s risen – and match ExxonMobil’s. In Forget Next Year’s Commodity Prices: Focus on 2075’s (1 September 2025), I demonstrated that nobody can reliably predict commodity prices over the next year – yet cautious analysis based upon sensible assumptions can plausibly infer … [Read more...] about Why Santos and Woodside are among our biggest holdings

I’ve shown that momentum and growth generally fail, and since 1990 small caps have disappointed. I now explain why value typically succeeds. Over the past couple of months, analysing monthly returns in the U.S. since January 1926, I’ve demonstrated that value stocks greatly outperform “momentum” stocks (for details, see Why value investing crushes momentum speculation, … [Read more...] about Why value investing usually outperforms

Conventionally defined and considering their greater risks, they outperform “growth” stocks – but not mid-caps, large caps or value stocks. Do the stocks of companies whose market capitalisations are relatively modest (“small caps”) outperform “large caps”? During the 1980s and 1990s, finance academics’ conventional – indeed, foundational – wisdom was unequivocal: they … [Read more...] about Why intelligent investors avoid small caps

For a century, value has virtually always beaten growth. And despite lagging over the past decade, its prospects again exceed growth’s. In Stocks for the Long Run (6th ed., McGraw-Hill, 2023), Jeremy Siegel noted a crucial fact: “earnings growth is not the primary consideration for better long-run returns” (for details, see Everything the mainstream says about earnings is … [Read more...] about Want to shrink your returns? Buy “growth” stocks!

Over periods up to 10 years, tech doesn’t reliably outperform coal, gas and oil – and over longer terms tech usually underperforms energy. According to Jeremy Siegel (Stocks for the Long Run, 6th ed., McGraw-Hill, 2023), if you want to outperform over the short term – that is, if you’re a speculator rather than an investor – you have two options: either (1) buy the stocks of … [Read more...] about Why we’ve never held tech – and have long owned energy

Momentum speculators mistake random fluctuations for trends; they also forego gains from compounding; hence they usually underperform. This article investigates fundamental assumptions – and refutes the key claim – of so-called momentum investors (who, as we’ll see, are actually speculators). Since the Global Financial Crisis, and particularly over the past several years, … [Read more...] about Why value investing crushes momentum speculation

His investment philosophy is his most precious legacy. His second-greatest is the ability to describe and explain it clearly and simply. Warren Buffett, the manager of an investment partnership in Omaha, Nebraska, began to buy the shares of Berkshire Hathaway, a struggling manufacturer of textiles based in New Bedford, Massachusetts, in 1962. He gained a controlling interest … [Read more...] about Warren Buffett’s second-greatest gift to investors