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Articles by Thomas Macpherson
Installing Programming Languages and What Your IDE Says About You…
Member-only story Thomas MacPherson · Follow 12 min read · -- Photo by Pakata Goh on Unsplash Probably nothing. But if you believe some tech pundit threads, your choice of IDE is as personal as that diary you’re supposed to be keeping. Are you a rugged Vim minimalist or a Jupyter Notebook enthusiast who loves markdowns as much as Python? Or do all of those words sound like gibberish? This is the first article in my series on learning to code for data science.
It’s Not You, It’s Me…
Thomas MacPherson · Follow 7 min read · -- “If you want to master something, teach it” — Richard Feynman. Source: Canva No, seriously. I’m writing these articles for me. But stick around if you want a wild ride through data science, the storms of financial markets, and athletic faceplants. I know I am late to the ‘blog’ party, but I have set myself a goal to share my experience in becoming a data scientist with anyone who will listen… or read.
Nintai Investments: 2022 Annua
January 2023 To Our Readers: Enclosed is our 2021 Annual Report and Performance Review for the Nintai Investments LLC Model Portfolio. The Model Portfolio is the composite aggregate returns of all Nintai Investments investment partner portfolios. Each partner's portfolio is unique to their individual needs. The portfolios comprise holdings from the current 21 stocks on our investment list.
In Memoriam: Charles de Vaulx
Yesterday, we learned about the untimely death of Charles de Vaulx (Trades, Portfolio) by apparent suicide at his offices in New York City. Before anything else, this is a human tragedy. By every measure, de Vaulx was a diligent, hardworking and incredibly thoughtful value manager. He leaves behind a wife and two children. Everyone at Nintai sends our condolences to his family at this very difficult time. Charles de Vaulx was a value investor who represented the best of the Old Guard.
Nintai Investments 2020 Annual Report
January 2021 To Our Officers and Investors: Enclosed you will find our report on the 2020 performance of the Nintai Investments LLC Composite Portfolio managed by Nintai Investments LLC. Returns reflect performance since October 31, 2017 when the company began operations. 2020 returns Overall, we were quite pleased with the Nintai model portfolio which is used as the basis for investment selection and asset allocation.
Nintai Investments Q3 2020 Returns
Over the past month or two, I have been asked by quite a few readers if I'd be willing to post a summary of Nintai's quarterly returns. As many of you know, I stopped writing for GuruFocus because I was having an increasingly hard time discussing the markets without stepping on our investors' toes. We at Nintai decided it would be fine if we removed discussion of any particular holdings.
Goldilocks and the Moat Concept
In 1864, Ulysses S. Grant became commander of all Union forces. Choosing to lead while attaching himself to the Army of the Potomac, several senior officers started warning him about how gifted Robert E. Lee – commander of the opposing Confederate Army of Northern Virginia – was and how he could do things no other general could conceive.
Quality Characteristics and Competition
“We define an economic – or competitive – moat as the ability of a portfolio company to create a product or service that is essential to their customer’s strategy or operations. An example of this might be a platform that is essential to capture, analyze and report customer usage data. There are companies like this – Veeva being an example – that are essential to life sciences drug development, promotion, and sales. This in turn generates extraordinary return on capital.
Passive or Active Investing - A Third Way
"Over the years, I've often been asked for investment advice, and in the process of answering I've learned a good deal about human behavior. My regular recommendation has been a low-cost S&P 500 index fund. To their credit, my friends who possess only modest means have usually followed my suggestion.
Correlation, Market Crashes and Investment Returns
"The huge volatility of the market broke down all but the most fundamental relationships between markets and securities. The usual day-to-day world where investors cared about subtleties like corporate earnings or analysts’ forecasts dissolved as the energy of the market was turned up. All stocks moved together; if it was a stock, it was sold like it was plasma physics: as matter becomes hotter, it becomes less differentiated.
Correlation, Market Crashes and Investment Returns
"The huge volatility of the market broke down all but the most fundamental relationships between markets and securities. The usual day-to-day world where investors cared about subtleties like corporate earnings or analysts’ forecasts dissolved as the energy of the market was turned up. All stocks moved together; if it was a stock, it was sold like it was plasma physics: as matter becomes hotter, it becomes less differentiated.
The Enduring Power of Cash
“We make money the old fashioned way. We earn it.” - John Houseman for Smith Barney If you are old enough, you may remember those commercials in the early '80s with John Houseman sitting in front of a burning fire in some gentleman’s club telling viewers that Smith Barney makes money the old-fashioned way – they earn it. I was never quite sure what they meant by that, but it certainly was a great line delivered by a great actor.
Stressing Quality and Price...Again
“The investment management business (it should be a profession but is not) is built upon a simple and basic belief: Professional money managers can beat the market. That premise appears to be false.” "Don't do anything because when you try to do something, it is on average a mistake." - Charles Ellis Sittin’ on top of the world Since the 2009 bottom of the credit crash, we’ve had an over decade-long market expansion which has provided investors with the longest bull market in recent history.
Dance With the One That Brought You
"When you have to make a choice and don’t make it, that is in itself a choice." - William James One evening a Cherokee elder told his grandson about a battle that goes on inside people. He said, “My son, the battle is between two “wolves” inside us all. One is Evil. It is anger, envy, jealousy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego. The other is Good.
Dance With the One That Brought You
"When you have to make a choice and don’t make it, that is in itself a choice." - William James One evening a Cherokee elder told his grandson about a battle that goes on inside people. He said, “My son, the battle is between two “wolves” inside us all. One is Evil. It is anger, envy, jealousy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego. The other is Good.
Mistakes of 2019
“Some the biggest variances are made when people are asked about their feelings about hypothetically losing something - like their life’s saving - and actually losing every penny they’ve saved over 40 years of work.
Looking Back at 2019
To Our Readers: Each year we try provide GuruFocus members with an overview of Nintai Investment’s composite portfolio performance for the previous year. Being a professional investment manager, we try to limit the amount of detail provided. Our performance was quite good considering portfolios ranged from 15% to 30% cash. Fourth-quarter 2019 and annual returns The fourth quarter of 2019 as well as the total returns for calendar year 2019 reflect U.S. markets hitting on all cylinders.
Evolution and Your Investment Criteria
“The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.” - Benjamin Graham “You have to understand accounting and you have to understand the nuances of accounting.
Evolution and Your Investment Criteria
“The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.” - Benjamin Graham “You have to understand accounting and you have to understand the nuances of accounting.
Stock BuyBacks: A Lesson Not Learned
“When you start looking at stock buybacks, you begin to realize you are playing a game of Three Card Monty. Nothing is really as it seems and the numbers never really add up. It truly is dealing with the cards stacked against you.” - Robert G. Warren Several years ago, I wrote about how many corporate executives buy back company stock at exactly the wrong time. They generally purchase as the share price hits an all-time high, then cease all activity when the stock crashes.
Playing by Your Own Rules
“The young man knows the rules, but the old man knows the exceptions." - Oliver Wendell Holmes Sr. “When the game is no longer played your way, it is only human to say the new approach is all wrong, bound to lead to trouble, etc. I have been scornful of such behavior by others in the past. I have also seen the penalties incurred by those who evaluate conditions as they were – not as they are. Essentially I am out of step with present conditions. On one point, however, I am clear.
Macroeconomics and Value Investing
At a macroeconomic level, Nintai has never tried to divine exactly where the equity markets, U.S. economy or global economies are headed. It’s a loser’s game if an investor feels they can time their exposure to any of them. We have always tried to find companies with deep competitive advantages where their product and services are vital to their customers' strategy and value proposition.
Giving Thanks - GuruFocus.com
"We have so much to be thankful for in this time of economic growth and prosperity. The markets keep going on their upward trend, jobs are plentiful, and opportunity is there for any who want to make a difference. In essence – be thankful, humble, and honored to be living in these most bountiful times.” - Gerald Nye “All through life there are opportunities in allocating capital – it might be your own time or money in personal development.
The Dynamic Duo: Portfolio Quality and Value Prices
“We’ve really made the money out of high-quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high-quality businesses.
When Time Isn't on Your Side Anymore
"The two most powerful warriors are patience and time.” - Leo Tolstoy “Great leadership is about continual change. An outstanding leader is always seeking opportunities in failure and always seeking improvement from success. Patience is key, but does not guarantee long-term prosperity.” - Iwasaki Yatarō In Japan, the Sengoko period (or, as translated into English, “The Age of Warring States”) ran from roughly the mid-15th century and ended with the Battle of Sekigahara in 1603.
Bad Picks or Bad Models: The Future of Value
“The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” - Albert Einstein “I’ve always been warned that when people say ‘it’s different this time’ it really isn’t very different. Yet if I look back over the last decade and I see so much underperformance by value investors (both traditional and the more modern-approach), I think to myself, ‘Is it really different this time?
Bad Picks or Bad Models: The Future of Value
“The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” - Albert Einstein “I’ve always been warned that when people say ‘it’s different this time’ it really isn’t very different. Yet if I look back over the last decade and I see so much underperformance by value investors (both traditional and the more modern-approach), I think to myself, ‘Is it really different this time?
The Fuzzy Thinking of Mixing Growth and Value
I recently finished writing a multi-part series on how value investors got the credit crisis and Great Recession of 2008 to 2010 so wrong. A weakness many investors and financial writers have is the inability to find in themselves the same faults they find in others. There’s the old adage that history doesn’t exactly repeat itself, but it often rhymes. This past year, I made a mistake that – while not an exact repeat of the errors made by value investors in the Great Recession – certainly rhymed.
The Largest Canary in a Very Big Coal Mine
In Part 2 on my series about value investing during the 2007 to 2009 Credit Crisis and market crash, I discussed some of the macro-issues that created an environment foreign to almost any value investor since the Great Depression of the late 1920s and 1930s.
Lessons From the Last Crash
“The past is a foreign country: they do things differently there” - L.P. Hartley, “The Go-Between” In part two of “Value Investing in Down Markets” (part one can be found here), I wanted to take the time to better understand the major drivers in why some value investor leaders did so poorly in the 2007 to 2009 market crash. There isn’t any simple answer.
Lessons From the Last Crash
“The past is a foreign country: they do things differently there” - L.P. Hartley, “The Go-Between” In part two of “Value Investing in Down Markets” (part one can be found here), I wanted to take the time to better understand the major drivers in why some value investor leaders did so poorly in the 2007 to 2009 market crash. There isn’t any simple answer.
Value Investing in Down Markets
Articles (167) | Author's Website | Bookmark Print If you are a value investor, are there core concepts and steps that can drive your approach to bear markets?
When Being Certain Isn't Enough
“All men make mistakes, but a good man yields when he knows his course is wrong, and repairs the evil. The only sin is pride.” - Sophocles “It is the highest form of self-respect to admit our errors and mistakes and make amends for them. To make a mistake is only an error in judgment, but to adhere to it when it is discovered shows infirmity of character.” - Dale Turner Over the course of my investing career, I’ve made some terrible investments. I’ve written about them before.
When Being Certain Isn't Enough
“All men make mistakes, but a good man yields when he knows his course is wrong, and repairs the evil. The only sin is pride.” - Sophocles “It is the highest form of self-respect to admit our errors and mistakes and make amends for them. To make a mistake is only an error in judgment, but to adhere to it when it is discovered shows infirmity of character.” - Dale Turner Over the course of my investing career, I’ve made some terrible investments. I’ve written about them before.
Investing in a Brave New World
“I’m not lost for I know where I am. But however, where I am may be lost.” - A.A. Milne “Pooh Wisdom” “Have you ever stopped to think that maybe you were wrong? Maybe, you only saw your point of view and you never once put yourself in the other person's shoes. Maybe, walking away from the senseless drama and spiteful criticism isn't the best thing to do. Maybe, for just once in your life you could wear another person's confusion, pain or misunderstanding.
The Changing Face of Debt
“Debt, we've learned, is the match that lights the fire of every crisis. Every crisis has its own set of villains - pick your favorite: bankers, regulators, central bankers, politicians, overzealous consumers, credit rating agencies - but all require one similar ingredient to create a true crisis: too much leverage.” - Andrew Ross Sorkin “No man’s credit is as good as his money.” - John Dewey Early this summer I wrote about debt and the Russell 2000 (“Where Are the Prisoners?
Advisor's Alpha: Vanguard's Model
“A customer talking about their experience with you is worth ten times that which you write or say about yourself.” - David J. Greer “Investment managers think their professional life centers around beating their respective index. No doubt this has a lot to do with the long-term success of their fund or role with the investment firm. Surprisingly though, that isn’t the most important thing when working with their clients.
An Agonizing Reappraisal
“When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.” - John Reed “Trying to figure out whether your core values are relevant in today’s world is a real struggle.
Reasoning From First Principles
“The discovery of truth is prevented more effectively, not by the false appearance things present and which mislead into error, not directly by weakness of the reasoning powers, but by preconceived opinion, by prejudice.” - Arthur Schopenhauer “All of our reasoning ends in surrender to feeling.” - Blaise Pascal When I began thinking about starting my own investment firm, I thought back to starting my two previous companies.
Industry Knowledge: How Much Is Enough?
“An expert knows more and more about less and less until he or she knows everything about nothing.” - William Mayo I was recently reading a great piece by Grahamites here on GuruFocus (“Blind Spots in Investing”). It was a cautionary tale about his research process related to DaVita (NYSE:DVA). One of the real challenges I’ve found to exist in investing is the breadth and depth of research and knowledge that is required to have an advantage in portfolio selection.
Industry Knowledge: How Much Is Enough?
“An expert knows more and more about less and less until he or she knows everything about nothing.” - William Mayo I was recently reading a great piece by Grahamites here on GuruFocus (“Blind Spots in Investing”). It was a cautionary tale about his research process related to DaVita (NYSE:DVA). One of the real challenges I’ve found to exist in investing is the breadth and depth of research and knowledge that is required to have an advantage in portfolio selection.
2nd-Quarter 2019 Performance Review
The past six months have been an indexer’s dream. You simply couldn’t choose a bad asset class. It's difficult to imagine that the second half of 2019 could be kinder to multi-asset investors than the first half. It was the best first half to a year for the S&P 500 since 1997. At the same time, the iShares Core U.S. Aggregate Bond exchange-traded fund had what looks like its best half on record.
Balancing Ethics With Returns
“Some companies can make millionaires out of their shareholders without a shred of moral character. However, we would argue that few of these shareholders have been long-term value investors.
Investment Managers Versus Individual Investors
“There are certain things that cannot be adequately explained to a virgin either by words or pictures.
Investment Managers Versus Individual Investors
“There are certain things that cannot be adequately explained to a virgin either by words or pictures.
GPS and Value Investing
“If you do not change direction, you may end up where you are heading.” – Lao Tzu “There is the great line that to finish first you must first finish. To do that, you have to stay on the road. You have to have guardrails that prevent you from driving into the woods. Another phrase is you can’t see the forest through the trees. To confuse the hell out of you all, I’m going to mix metaphors. You won’t finish first if you drive off the road into a bunch of trees. That’s bad. Really bad.
Fata Morgana and the Illusion of Safety
For centuries, the fata morgana – a mirage created by refracted light – caused varying amounts of fear, panic and wonder to sailors around the world. Named after King Arthur’s sister Morgana (who lived in a crystal city under the sea that would occasionally surface), sailors would record seeing everything from armies fighting battles to huge fleets crossing the ocean.
Competitive Moats: A Flexible Approach
“To the question, what shall we do to be saved in this world? There is no other answer but this: Look to your moat.” - George Savile, 1st Marquess of Halifax “Perhaps the greatest flaw in the history of castles was thinking moats were a simple defensive tool. Not true! Moats can be both defensive and offensive weapons. In defense, they could be used to force the enemy to attack in a particular spot such as the castle’s most heavily defended area.
Sometimes Less Is More, but Mostly Not
“There is one thing of which I can assure you. If good performance of the fund is even a minor objective, any portfolio encompassing one hundred stocks (whether the manager is handling one thousand dollars or one billion dollars) is not being operated logically. The addition of the one hundredth stock simply can't reduce the potential variance in portfolio performance sufficiently to compensate for the negative effect its inclusion has on the overall portfolio expectation.
Sometimes Less Is More, but Mostly Not
“There is one thing of which I can assure you. If good performance of the fund is even a minor objective, any portfolio encompassing one hundred stocks (whether the manager is handling one thousand dollars or one billion dollars) is not being operated logically. The addition of the one hundredth stock simply can't reduce the potential variance in portfolio performance sufficiently to compensate for the negative effect its inclusion has on the overall portfolio expectation.
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