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Market Extremes and Unintended Consequences

Posted: May, 21, 2019

  “…we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road.” – Jerome Powell, October 2012   As we near the twenty-year anniversary of St. James, it’s worthwhile to assess the role that valuation plays in the … Continue reading “Market Extremes and Unintended Consequences”


St. James Core Equity – Active Share, Risk and Alpha

Posted: November, 14, 2018

As of December 2017, passive investing strategies accounted for roughly 37% of the combined U.S. assets under management, up from 12% in 1995 (New Constructs, 2017 – “Hidden Trigger for Another (Flash) Crash: Passive Investing”):     ETF and passive investing popularity are celebrated as a win for small investors, primarily due to cost savings … Continue reading “St. James Core Equity – Active Share, Risk and Alpha”


Value Investing in the Age of QE

Posted: August, 21, 2018

Year-to-date the Russell 1000 Growth Index ($RLG) is up +12.8% versus the Russell 1000 Value Index ($RLV) at +2.2%. Meanwhile, global investors are losing money (EFA and EEM): Although growth and value can often diverge, the magnitude of this disparity is somewhat extreme.  Last month Goldman Sachs highlighted the bifurcation of the U.S. market, noting … Continue reading “Value Investing in the Age of QE”


Wall Street Journal: Value Investors Face Existential Crisis

Posted: June, 5, 2018

In a June 4, 2018, Wall Street Journal article by Michael Wursthorn “Value Investors Face Existential Crisis After Long Market Rally”, the author recognizes the disparity between value and growth over the nine year bull market.  To summarize, the growth investment style has outperformed value every year except one.  Year-to-date, the distinction is even more … Continue reading “Wall Street Journal: Value Investors Face Existential Crisis”


Core Equity Portfolio – Q3 2017

Posted: October, 17, 2017

Based on our estimate of fair value relative to the company’s current stock price, we determine each company’s current margin of safety in the Core Equity portfolio. We aggregate the individual company margin of safety based on composite weight within the Core Equity portfolio to determine the overall discount to fair value. On a quarter-to-quarter basis, … Continue reading “Core Equity Portfolio – Q3 2017”


Core Equity Portfolio – Q2 2017

Posted: August, 10, 2017

Based on our estimate of fair value relative to the company’s current stock price, we determine each company’s current margin of safety in the Core Equity portfolio. We aggregate the individual company margin of safety based on composite weight within the Core Equity portfolio to determine the overall discount to fair value. On a quarter-to-quarter basis, … Continue reading “Core Equity Portfolio – Q2 2017”


Portfolio Management and Cash

Posted: May, 16, 2017

Today’s S&P 500 is one of the three most overvalued markets in U.S. history based upon a number of metrics, including price-to-GDP, price-to-sales, price-to-book value and the CAPE (Cyclically Adjusted PE). Historically – 1929, 2000, 2007 – these conditions of overvaluation resulted in significant corrections of 50% or greater.  This is not to suggest a … Continue reading “Portfolio Management and Cash”


Core Equity Portfolio – Q1 2017

Posted: April, 12, 2017

Based on our estimate of fair value relative to the company’s current stock price, we determine each company’s current margin of safety in the Core Equity portfolio. We aggregate the individual company margin of safety based on composite weight within the Core Equity portfolio to determine the overall discount to fair value. On a quarter-to-quarter basis, … Continue reading “Core Equity Portfolio – Q1 2017”


Market Reflections

Posted: February, 10, 2017

PDF: St. James Market Reflections – February 2017 All U.S. regulated investment disclosure statements warn “past performance is no guarantee of future success.” We believe this to be an incomplete thought, as the success of an investment is dependent upon the implementation of a disciplined methodology, or process, consistently applied throughout an entire market cycle. … Continue reading “Market Reflections”


Core Equity Portfolio – Q4 2016

Posted: January, 17, 2017

Based on our estimate of fair value relative to the company’s current stock price, we determine each company’s current margin of safety in the Core Equity portfolio. We aggregate the individual company margin of safety based on composite weight within the Core Equity portfolio to determine the overall discount to fair value. On a quarter-to-quarter basis, … Continue reading “Core Equity Portfolio – Q4 2016”


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