Cove Street Capital

In investing and life, spending your time on critical variables and what is really important directionally pays dividends. AI can legitimately reduce “task time” in the investment business, but it does not replace experience and judgement. Not having double-digit bodies running around also helps one focus.

In this year-end reflection, we eschew the typical theater of market predictions to instead examine the "knew-it-all-along" effect and the cognitive illusions that make past volatility seem orderly.

The recent fun and games involving the NBA and the gambling indictments are certainly amusing on their own merits, but do they say something else?

To paraphrase Churchill, financial markets are a “long, dismal catalogue of the fruitlessness of experience and the confirmed unteachability of mankind.” But we hope you had a wonderful summer.

Trade is an economic alliance that benefits both countries. There are no losers only winners…And trade helps strengthen the free world.

Unlike most of the rest of the world, I will attempt to minimize all there is to say about the beginning of the next 4 years, as the persistent yack and what to make of it reverberates in all corners of the financial globe.

At the 2018 Berkshire Annual Meeting, Buffett noted that “multiple times in my life, people have felt the country was more divided than ever.

While the beach version of SoCal has had an epic, non-marine layer summer, it seems to have been enjoyed by few locals who instead violate the cardinal rule of adult life without children living at home and nevertheless travel to Europe in summer. We haven’t missed you.

Here we are in June. Things are mostly continuing in a Newtonian fashion: “A stock at rest will remain at rest, and a stock in motion will remain in motion, seemingly at constant velocity and in a straight line, unless acted upon by a net force.” Or Elon swiping your Nvidia chips.

2024 got started in a similar fashion to which 2023 ended: eyes were tightly focused on the proverbial briefcase of Federal Reserve Chair Jay Powell as to interest rate policy…and the conclusion for now is that interest rate cuts in 2024 remain largely on the table.

We see the usual mess and risks in the world as you do, but we also are seeing more than enough interesting things in which to invest capital.

The calendar third quarter of 2023 was a messy one for financial markets at large, and we were not immune to its lack of charms. Nonetheless, it’s been a pretty good year for our small-cap strategy.

The world turns. New people are born and eventually move off the couch and into something resembling employment. And thus new generations of nonsense about “solved” topics are produced.

There is a whole world going on beyond the 8 largest stocks, which some people can’t see without a microscope or frankly have no inclination to bother stepping into the lab.

“Desengaño” was noted by one Antonio Garcia Martinez in his most excellent book, Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, as a unique style of Spanish genre painting.