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Recent Insights

May 19, 2022

Elon Musk recently proposed a buyout of Twitter at 54.20 per share. Twitter stock traded over 50 following the news but in recent weeks the stock has dwindled. What can we infer from Twitter’s stock price about the possibility of Musk’s completing his acquisition of Twitter?

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May 9, 2022

Recent times have been dreadful for investors especially for holders of growth and tech stocks (See “The Crash of the High Fliers”) . Many are waiting for signs of an upturn. Do a few big up days mean the carnage is over?

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May 2, 2022

Growth in earnings doesn’t necessarily equate to growth in a stock’s price. A company’s growth must meet or exceed the expectations of its investors to increase the stock price. When they fall short of these lofty expectations the results generally spell trouble for shareholders.

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April 13, 2022

Download Memo as PDF Time For a Change? There are two themes that we have stressed in our quarterly memos and in various episodes of our Reflections on Investing video series. The first is that interest rates have been extraordinarily low, particularly relative to the rate of inflation. The second is that stock prices have been

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April 4, 2022

Until recently fixed income has offered high risk and low return. It looks like things might be changing. We take another look.

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Featured Publication

By Bradford Cornell, Shaun Cornell, Andrew Cornell Introduction An investor would have to have been living under a rock not to have noticed the appreciation in the value of automobile companies in the last two years. Tesla, of course, is the premier example. In less than two years, its market capitalization has soared from less than $100 billion to over $1.2 trillion at one point. But Tesla is hardly alone. Recent electric entrants like Xpeng, Nio, Rivian, and Lucid have all seen their valuations jump. Even traditional automakers like Ford, GM and Volkswagen saw their valuations rise when they announced electric vehicle plans. This across-the-board run-up is sufficiently unprecedented that it calls for a valuation analysis of the automotive industry. Are the price increases consistent with reasonable fundamental valuation – for all companies in the industry or just a small group? What are the investment implications? Before turning to the data and analysis, there is a key economic principle related to technological innovation and valuation that must be kept in mind. Specifically, a new technology does not translate into value creation for a company that adopts it unless it produces returns on invested capital (ROIC) in excess of the cost

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