Here we will post articles on investing, family matters, highlighting our contrarian and unique approach.
Not all returns are equal
During my recent European trip at a dinner with friends, someone asked me if the market was up that day. It’s a question I often get from anyone who knows that I’m an investment advisor and a stock-picker. I often disappoint them saying that I don’t know because I haven’t looked.
Are all up days or years in the stock market the same, though? From the outside, a gain of 10% of the entire stock market’s performance seems to be identical with a 10% increase in price, and thus good news for stockholders. In actual fact, not all 10% annual returns are equal.
How to compound your wealth?
If we can only shift our mindset from getting rich overnight to compounding wealth over a lifetime, everything changes and our odds of success dramatically rise…
INVESTING: FROM BEN GRAHAM TO PHIL FISHER TO… MICHELANGELO?
Like many fundamental (serious) investors, my early influencers were Philip Fisher and Benjamin Graham. It could be said that growth investors are looking for the next Microsoft, Apple, Google or Amazon. In contrast, value investors look for neglected stocks that are so cheap that bad news won’t hurt them much, while any good news could trigger a major upward re-evaluation. Both approaches, however, seek the same result: to uncover and analyze winning stocks.
SIZE, CONFLICTS OF INTEREST and FIRM CULTURE
As We Enter Our Third Year, Some Thoughts About How to Pick, and Be, the Right Money Manager
VALUE / CONTRARIAN INVESTING – VERSION 3.0?
The advent of the knowledge economy is not making life easier for disciplined investors. In times of uncertainty like these, character will prevail.
PLANNING OUR LIFE AND BEYOND
When we at Sicart engage with clients in planning for the management, use and disposition of their fortunes, we first try to spend ample time on defining the kind of life they want to live, the goals they hope to achieve, and what legacy they wish to leave behind. Whatever the age of the clients, their views on these subjects are usually vague – probably because decisions about them do not seem urgent and are expected to come into proper focus as they age. Yet procrastination is not an option for any of us.
Infinite Horizon, Finite Assets
Investing in finite assets with an infinite investment horizon is one of the unstated challenges of our business. The task becomes even more difficult as the markets boost prices of assets that are not only intangible in nature, but also whose profit-generating ability is questionable or potentially short-lived.
SOLITUDE OF THE WEALTHY:
My partner Bogumil Baranowski has discussed some of the psychological problems associated with family patrimonies in his series “Blessings & Curses of Inherited Wealth – The Guide for Inheritors.” Over my years of helping multi-generational families to preserve and grow their wealth, I too have noted the challenge of maintaining “normal” relationships with friends or relatives who have less money.
The Great Investor In You – Our first TEDx Talk
There are three secret advantages we already have over professional investors. But how can we use them to become great investors ourselves?
What is long-term anyway?
Recent market volatility has made many of us jumpy, and many investors agree that this might be a time to show increased caution. But one subject still prompts very diverse opinions: the investment horizon.
How do you stay a millionaire?
“How do I keep what I have?” is the query we hear much more often than, “How much will the market rise this year?” Those who are familiar with our long-term value contrarian mindset know better than to pose the latter question seriously. The recent increase in volatility and a worldwide sell-off in major indices has broadened the discussion. Investors started to focus more on keeping what they’ve made in this market. Some wisely realize that they might not have the time to make their money back if they were to lose it. What can be done about that?
CONTRARIAN VALUE: EASIER SAID THAN DONE
“We consider ourselves long-term, patient, contrarian value investors” are the first words in the “How We Invest” section of our website. But what do they mean in practice?
YEAR-END PEARLS OF WISDOM
For many years, I have been collecting quotes, citations and other bons mots. Of course, Googles and the likes have made this modern variation of plagiarism much easier in recent years, sometimes even dispensing quote addicts like me from reading original books in the text. On the other hand, there are good reasons besides plagiarism … Continue reading YEAR-END PEARLS OF WISDOM
Blockchain, Bitcoin, and the future of money
Blockchain has been on our minds for a while now, and here we propose a three-part discussion.
First, we will examine the potential benefits of blockchain technology. Second, we will explain why we believe that Bitcoin might turn out to be a misuse of a great technology. Finally, we’ll sketch out our idea of the future of money, finance, capitalism.
HUBRIS AND FAILURE: SOME USEFUL INVESTMENT LESSONS
Last year, French journalist Christine Kerdellant wrote a book with an intriguing title (Ils se croyaient les meilleurs – Éditions Denoël 2016), which could be translated as: “They thought they were the best – a history of great management mistakes.” The point is that the most successful entrepreneurs are those who have first stumbled, but have learned from their mistakes. Interestingly, they often are more prone than professional managers to search out and hire collaborators who also have experienced failure and have survived. The book appealed to me because, in Sicart Associates’ business of wealth and investment management, mistakes are quite useful — on the condition that they don’t recur too often, and that lessons are learned from them.
What it takes to build a great family
Introducing James E. Hughes, Jr., Esq. the author of Family Wealth: Keeping It in the Family, and of Family: The Compact Among Generations. Mr. Hughes reminds us: “As it takes 150 years for a copper beech tree [ metaphorically, a great family] to mature, plant today because there is no time to waste.” He points out that “The vision underlying a system of family governance must be the enhancement of the pursuit of happiness of each individual family member as part of the enhancement of the family as a whole for the purpose of achieving the long-term preservation of the family’s wealth: its human, intellectual, and financial capital.”
OF STORIES AND NUMBERS
Participants in the investment markets tend to fall into one of two categories. A growing number engages in a relative performance contest where they essentially compete against each other or against “unmanaged” indexes over relatively short periods of time: one, five or, more rarely, ten years. These short periods are convenient for consultants and marketing staffs but, in our observation, sprinters seldom win marathons. We thus prefer to ignore short- or medium-term market fluctuations and to concentrate on our goal, which is to grow the patrimonies of our client families — along with our own — over multiple cycles and several generations.
A CAREER, A FRIENDSHIP AND A MORAL TALE IN MEMORIAM of MRS. B
Financial institutions like to claim that they always put their clients’ interests before their own — or at least on par with them. Real life shows us scant evidence of that claim. Truth be told, it is hard to sustain a money-management firm as a business (rather than as a professional practice, which used to be the model) without running into conflicts between your clients’ interests and your own.
I deeply believe that resolving those conflicts of interest with probity is key to building a successful practice over time, and I have at least one compelling example to help me remind young colleagues that probity pays.
New Generation Of Successful Entrepreneurs, New Ways Of Giving Back And Monitoring
Introducing Alexandre Mars, a New York City based, French-born serial entrepreneur, and engaged philanthropist who, in 2015, was named one of New York City’s top 20 philanthropists under 40 by the New York Observer.
The Inheritance Plan – The Right And The Wrong Way
In the third part of the Guide for Inheritors Series, we introduce Jeffrey Condon the Author of Beyond the Grave. We will learn about the importance of having an inheritance plan, and the author explains that there is the right, and the wrong way. We are reminded how crucial it is to treat beneficiaries equally. Among many other lessons, we also find an interesting discussion of one of the most frequent questions when it comes to inheritance – how much is too much?
Breaking The Triple Taboo – The Inheritance
Here you’ll find the second part of the Guide for Inheritors Series. This time our guest is Ann Perry, the author of The Wise Inheritor: A Guide to Managing, Investing and Enjoying Your Inheritance. She tells us that money is the last taboo, and inheritance a triple taboo. She also reminds us that inherited money should be treated differently. We learn that with looming biggest ever wealth transfer of tens of trillions of dollars, more of us than ever will be facing the dilemmas of inheritance. What can we do to be better prepared?
How We Give Matters More Than How Much We Give
In the first part of the series, we are introducing Barbara Blouin’s Publications of the Inheritance Project. Inheriting a fortune – or being lucky enough to leave one to your children – can be a mixed blessing. As the largest-ever inter-generational wealth transfer is upon us, it’s important to realize that how we give may matter more than how much.
Cyclical Opinions – Secular Approaches
Technological progress makes the world evolve and change. As it does, Sicart Associates believe that the secret to success is to occasionally adapt opinions to changed circumstances while staying true to our long-term contrarian value investment principles.
The Entrepreneur and the Steward of Capital
As we work with more and more entrepreneurs around the world, we find a number of key differences between them and portfolio investors.
The Jade Sculptor and the Serial Entrepreneur
A few years ago, I was invited to visit a new jade museum that was about to open to the public in Beijing. Many of the pieces on display had been left behind by Chiang Kai-shek (former leader of the Kuomintang party) when he and his followers retreated to Taiwan in 1949.