E-NEWSLETTERS
E-Newsletters
Read our past e-newsletters and sign-up to subscribe for future newsletters.
SEPTEMBER 30, 2024
RECALIBRATIONS
The Federal Open Market Committee (FOMC) just wrapped up their sixth official meeting of the year on Wednesday, September 18th and it resulted in what many believe to be the first of a series of rate cuts that may extend all the way into 2026. We think it would be helpful to analyze what this might mean for the capital markets going forward and how one might want to position for the coming months ahead.
JUNE 28, 2024
A NARROW MARKET
The past few years have been quite a whirlwind for investors, and we want to take the opportunity to review our investing philosophy and compare and contrast it against some interesting phenomena taking place in the capital markets these days.
First and foremost, CORDA’s foundation is a belief in income and growth investing and owning great businesses that place emphasis on sharing profits primarily in the form of dividends. We have discussed how a disciplined investment strategy should consist of a philosophy that seeks to take ownership of these businesses when they are out of favor with the investing public or trading at a discount to fair value. Another way of saying this is that we are a value buyer, willing to strike when we see a sale price.
MARCH 28, 2024
TIMING IS EVERYTHING AND NOTHING
We are writing this letter on the opening weekend of the NCAA Men’s and Women’s Basketball tournament, affectionately and commonly known to most as March Madness. It seems like a wide swath of Americans take part in filling out a bracket with the goal to predict the winner of each game throughout the entire tournament, with the overall intent of having the final pick still standing at the end. On the Men’s bracket, there are sixty-eight teams at the starting line and usually by the second day of the tournament, there is not a single entry out of the millions that were submitted that had predicted every game correctly. Every year, there is normally a big upset win by a lowly seeded team or many times a small or unknown school captures the attention of the sporting public as they make a magic run to the sweet sixteen. However, when the tournament runs its course and arrives at the semi-finals, typically those seeded 1 and 2 are usually the teams who make it to the final four. Usually there are big upsets and always a special team that captures the hearts and minds of the rooting public, but the Cinderella story isn’t worth basing your entire bracket on. It’s the favorites that typically win out.
DECEMBER 29, 2023
WHAT HAVE WE LEARNED
As we embark on another year, we were reminded by one of our clients that their favorite letter from us was back in 2018 when we asked the entire CORDA team to reflect on their own personal failures and successes as investors, and more specifically, to find out what they had learned over the years as investors that helped them be more confident and capable with their money. In the pages that follow, we will share many of their thoughts and in many cases, direct quotes from others we recognize then and now as legendary investors. For example, Charlie Munger (Warren Buffett’s trusted colleague) recently passed away, but some of his financial acumen and pearls of wisdom will be presented below as we expand on what we wrote in 2018. Our goal was to collect these various ideas and thoughts and write them down so that we could all refer to them on occasion, knowing full well there will be a time and place when the market is choppy, the news headlines scary, and the tendency will be to change your strategy at a less than opportune time. The following gems and nuggets might cause you to step back and be more measured in your response to a landscape that is constantly changing.
SEPTEMBER 30, 2023
THE MAGNIFICENT 8 AND EVERYTHING ELSE
We are headed into the home stretch of 2023 and the market and economy continues to befuddle the most seasoned of investors and consumers. We’ve been grappling with the recession narrative for almost two straight years. Recall in Q1 and Q2 of 2022, U.S. Gross Domestic Product (GDP) was negative for two consecutive quarters, the necessary economic condition to declare an official recession. However, one theory suggested the near record low level of unemployment was a contrary indicator proving the U.S. was not undergoing broad economic weakness. Fast forward about 18 months now, and we find the Federal Reserve Bank of Atlanta’s GDPNow model predicting a robust 4.9% growth in GDP for the third quarter that ends today. That’s a far cry from where we were at the beginning of 2022! So where is this economy headed in 2024, that is the question, right!? Time will tell.
JUNE 30, 2023
A SPLIT MARKET
Housekeeping: TD Ameritrade to Charles Schwab:
Before we get into the nitty gritty of the financial markets, we want to provide an update about the TD Ameritrade account conversion to Charles Schwab. To highlight something that must be proclaimed, first and foremost, CORDA is your “Go-To” relationship partner. You literally do not need to contact or liaison with Schwab or TD for any reason, at least regarding your accounts under our care. If you need something done on your account, contact us. Certainly, Schwab and TD have provided online web access, 800 numbers, or even physical branch locations to call or visit if you ever wanted to contact them directly, but we hope you have or will continue to utilize our diligent staff should you need service of any kind. For those of you who might have forgotten, Schwab effectively purchased TD Ameritrade a few years ago and we are
finally at the point where they plan to turn off the TD Ameritrade website and the app-based portal over Labor Day weekend in early September. Everything TD Ameritrade-related will finally move to the Schwab umbrella at that time. Believe it or not, Schwab has been running TD for two years now, but you may not have even noticed.
MARCH 31, 2023
BUSINESSES, NOT STOCKS
Can you believe we’ve made it to the end of the first quarter of 2023? This year has taken everyone by surprise (as they normally do), and as we cope with the current banking turmoil, we need to address things that nobody had on their radar screen a few months ago. Going into the year the primary worries were inflation, interest rates, recession, and war, but the past few weeks have had investors grappling with concerns over the banking system while getting an education about FDIC insurance coverage! Fortunately, there are significant differences between today’s economic crisis versus what was taking place back in 2008 and 2009. Back then there was a real concern of financial markets freezing up due to bad debt (real estate related) and legitimate insolvencies, whereas today, we have a mismatch between time deposits against U.S. Government bonds with maturities at ten years or more. This time around, there is no credit concern with the debt, mind you we are referring to U.S. Government Treasuries and other direct obligations – they will be money good – but only if held to maturity.
DECEMBER 30, 2022
UNCERTAINTY = OPPORTUNITY
Market volatility dominated the headlines in 2022 as inflation exceeded market and Fed expectations. The record fiscal stimulus following the Covid outbreak and the Federal Reserve’s excessive easy monetary policy resulted in inflation stubbornly persisting well above historical levels. Although there are signs that inflation is rolling over, the Fed seems hellbent to continue its tightening campaign as we enter 2023. This is, ironically, the opposite of its approach 18 months ago when it was clear inflation was ramping up. All the while, the Fed continued with its zero-interest rate policy despite the evidence surrounding it. As we have shared many times in the past; those who attempt to predict short term stock market returns or interest rate levels would be acting just like the Fed, their crystal ball is no better than anybody else’s.
SEPTEMBER 30, 2022
WHAT CAN YOU CONTROL?
Do you have a “Type A” personality or know someone who does? Type A behavior is characterized by ambition, competitiveness, drive, focus, and control. One definition of a Type A person also suggests aggressive traits, a need for quantity versus quality and an unrealistic sense of urgency. Apparently, it is commonly associated with risk of coronary disease and other stress-related ailments. We might argue some Type A characteristics are quite beneficial, until they become excessive and all consuming, perhaps causing harm to yourself and others – then it might be best to slow it down a bit.
JUNE 30, 2022
INVESTING IN A TOPSY TURVY MARKET
As we embark on the back half of a peculiar year, we looked through the archives here at CORDA and sought to identify some of the best saving and investing tenets that we have accumulated over the years. In the pages that follow, we share many of the thoughts and ideas from some of the greatest investors of all time, along with thoughts curated from those of us here on the CORDA team. We collected these theories and observations from legendary investors so that we can refer to them on occasion, knowing full well there will be times, like now, when the market is weak, and the tendency for some investors will be to get shaken out and lose track of the principles that typically lead to successful outcomes. The following gems might cause you to step back and be more measured in your response to a topsy-turvy market.
MARCH 31, 2022
IMAGINE THE POSSIBILITIES
Imagine this: The 1980 version of yourself decided to put $10,000 into the S&P 500, and you were such a dedicated investor you left that lump sum alone for 40+ years. Today your original $10,000 investment would be worth a little over $1.3MM. Okay, that all sounds good on paper, but we know it’s just not that simple!
DECEMBER 30, 2021
AN OWNERSHIP MENTALITY THROUGH THICK & THIN
As we head into a New Year, we reflect on the year past and it seems somewhat mandatory to drag out our crystal ball to help set a course for the upcoming year. Our customary optimism about owning high quality, cash flowing, sustainable and shareholder friendly businesses purchased at the right price is a bedrock of our investment plan, and it hasn’t let us down over the long haul. Yet we must remind ourselves that stocks do not move straight up and mentally prepare for a potentially volatile market that did not have a single 10% correction in 2021.
SEPTEMBER 30, 2021
SHOULD I BE HEDGING?
So far 2021 has been a good year for those who have stayed invested in equities. Although the major indexes are trading near all-time highs, beneath the surface there has been a significant amount of churn with many stocks trading greater than 10% off their 52-week highs and fewer above their 200-day moving averages. Moreover, we are smack dab in the middle of what historically have been a blustery couple of months for the stock market. September and October have traditionally been the weakest months of the year, with an average decline of -0.7% in the Dow Jones Industrial Average going back to 1900 and it has finished positive only 48% of the time. This does not mean we can’t trade higher in the coming weeks and set new highs, but understanding the past helps us better intellectualize what is possible going forward.
JUNE 30, 2021
SUCCESS IS WHERE PREPARATION MEETS OPPORTUNITY
The title to our quarterly letter this month can be attributed to either Seneca, Zig Ziglar, or the head coach of Duke’s basketball team – Mike Krzyzewski, all depends on where you have heard it or the result of a Google search. Either way, we are trying to grab your attention right out of the gate and keep it for the next five minutes!
MARCH 31, 2021
THE PSYCHOLOGY OF INVESTING
Stanford Professor Scott Sagan once said something everyone who follows the economy or investment markets should hang on their wall: “Things that have never happened before happen all the time.”
History, from Greek – historia, meaning “inquiry,” is the study of the past. In most cases, it is the study of surprising and big events in the past, and investors use it as an unassailable guide to the future. Isn’t that ironic? Do you see the problem?
DECEMBER 31, 2020
BACK TO THE NEW NORMAL
As we head into the New Year, in addition to reflecting on the past, it also seems obligatory to drag out our crystal ball to help set a course for the upcoming year. Our customary optimism about owning high quality, cash flowing, and shareholder friendly businesses at the right price is a permanent feature to our investment plan, virtually set-in stone. However, you can be assured we maintain a cautious mindset about how to deploy capital in an ever-changing environment. This past year, more than one client has reminded us how in our letter 12 months ago we predicted a decline at some point, but it was going to be from something that nobody was talking about – and lo and behold, we wish we had not been so on point with that comment!
SEPTEMBER 30, 2020
A VALUE BUYER RECIPE WITH DIVIDEND GROWTH SPRINKLED ON TOP
The secret to growing wealth was spelled out by the godfather of value investing, Benjamin Graham, over eighty years ago when he wrote, “The real money in investing will have to be made – as most of it has been in the past – not out of buying and selling, but out of owning and holding securities, receiving dividends and interest, and benefiting from their long-term increase in value.” The challenge in this endeavor, as we all know, is managing our emotions and making sure we have the fortitude to not get discouraged in the short run and to maintain ownership in businesses that may be temporarily out of favor price wise. This is especially true today as the quick trading mentality exhibited in today’s stock market and the denizens of the Robin Hood app have pushed up some share prices in high-flying stocks to unreasonable levels. All the while fundamentally sound and long-established businesses are being crowded out by the hyper kinetic fund flows to a handful of stock market darlings.
JUNE 30, 2020
AN OWNERSHIP MENTALITY
Can you believe we’ve made it to June 30th? This year has taken a toll on everyone, and as we cope with the pandemic and its resulting physical, economic and emotional fallout, we find ourselves digging deep. First, we want to say that all of you are in our thoughts. We have had a tumultuous few months and we believe society has made some permanent changes for the better. You may not feel it directly just yet, but we believe over time, our country and our way of life will be vastly improved.
APRIL 6, 2020
QUARTER END CLIENT LETTER
We extend our best wishes and thoughts to you and your loved ones as part of our extended CORDA family as we collectively cope with the impact of the COVID-19 pandemic. We recognize the widespread uncertainty during this time due to the multitude of headlines and ever-changing circumstances that seem to compound each day. We are grateful for the renewed sense of community that has arisen as we all take steps to comply with prescribed public healthcare directives. We know there is much more work to be done but are optimistic that the measures will be successful.
DECEMBER 31, 2019
A VALUE BUYER SEARCHING FOR DIVIDEND GROWTH
The secret to growing wealth was spelled out by Benjamin Graham over seventy five years ago when he wrote, “The real money in investing will have to be made – as most of it has been in the past – not out of buying and selling, but out of owning and holding securities, receiving dividends and interest, and benefiting from their long-term increase in value.” The challenge in this endeavor, as we all know, is managing our emotions and making sure we have the fortitude to not get discouraged in the short run and to maintain our ownership in businesses that may be temporarily out of favor price wise.
SEPTEMBER 30, 2019
WHAT CAN YOU CONTROL?
Do you have a “Type A” personality or know someone who does? Type A behavior is characterized by excessive ambition, competitiveness, drive, focus, and control. One definition of a Type A person also suggests aggressive traits, a need for quantity versus quality and an unrealistic sense of urgency. Apparently it is commonly associated with risk of coronary disease and other stress-related ailments. We might argue some Type A characteristics are beneficial – especially in moderation – but when it swings to causing harm for yourself and others, then you have probably crossed the line.
JUNE 28, 2019
WHAT’S YOUR NUMBER PART II
Do you remember the last time we asked if you were prepared for the next downturn? Worrying about economic downturns or market corrections might sound unusual coming from your dedicated and downright committed long-term oriented business owner’s, but we are always mindful to what might be lurking around every corner.
MARCH 31, 2019
THE ODDS ARE VERY GOOD
CORDA’S foundation is a belief in value investing and owning great businesses that place emphasis on sharing profits in the form of dividends. We have discussed how a disciplined investment strategy should consist of a philosophy that seeks to take ownership of these businesses when they are out of favor with the investing public or trading at a discount to fair value. This approach allows for a margin of safety in the near term should you happen to pay too much.
JANUARY 7, 2019
WHAT WE HAVE LEARNED
As we embark on another year, we asked everyone on the CORDA team to reflect on their own personal failures and successes as investors, and more specifically, what have they learned over time to help make them better investors. In the pages that follow, we will share many of their thoughts and in many cases, direct quotes from others they recognize as legendary investors. Our goal was to collect these various ideas and theories and write them down on a piece of paper so that we could refer back to them on occasion, knowing full well there will be a time and place when the market is weak and the tendency will be to get shaken out. The following gems and nuggets might cause you to step back and be more measured in your response to a topsy-turvy market.
SEPTEMBER 30, 2018
WHAT’S YOUR NUMBER?
Are you prepared for the next downturn? As you may know, many significant market declines are associated with recessions. No one really knows when the next recession might occur and making economic predictions is fraught with danger (as discussed in the last quarterly update). Nonetheless, we would argue that the current expansion, closing in on ten years in length, would mean we are theoretically closer to the next recession simply based on the history of boom and bust cycles.
JUNE 30, 2018
LESSONS FROM OMAHA AND OTHER MUSINGS
In early May, Berkshire Hathaway Inc. held their annual shareholder meeting in Omaha. While some of you may agree or disagree with Berkshire Chairman and CEO Warren Buffett on certain matters, we believe his investment philosophy is world class. We have attended the shareholder meeting on multiple occasions in the past, but for the third year in a row via a partnership with Yahoo Finance (incidentally owned by Verizon), Berkshire has streamed the meeting live via the internet. We’ve been able to enjoy all the festivities from the comfort of our own homes.
MARCH 29, 2018
BE LIKE PRINCE
Opening day for baseball season is upon us with a slate of games scheduled this weekend and we couldn’t help but notice the Texas Rangers’ Prince Fielder is set to make $72mm over the next three seasons. What is unusual about this is that Mr. Fielder hasn’t played in a game since the 2016 season and is officially retired from Major League Baseball. Yet, apparently due to a second neck injury, and the wear and tear of twelve seasons spent in Milwaukee, Detroit, and Texas, Prince retired after playing in 89 games in 2016 and walked away with a career low .212 batting average during that injury-riddled campaign. As far as we know, he may still have a great shot at a long, contented and happy/healthy life, and we wish no ill upon him!
DECEMBER 31, 2017
THE DIVIDED PAYING TORTOISE VERSUS MARKET DARLING HARE
Ever wonder what you might have done if you had bought a ticket to the super lotto drawing the last time it made headlines this past summer and you had won?! We don’t know for sure if it’s ever come close toa billion-dollar payout, but we are certain you’d have some fun spending $500mm or more if you had it. With mega lotto bucks on your mind and for the purpose of this letter, we want you to think on a grand and magnificent scale by considering a cool $1 trillion or more to spend on some investments. Yes, that’s $1 trillion with a T, but keep in mind it’s not all that far fetched to think there may soon be a single company with that price tag attached to it. Amazon, Apple, and Facebook are ones that come to mind when you ponder which company might breach $1T first.
SEPTEMBER 29, 2017
WHAT IF YOU ARE WRONG?
These past few weeks have brought an unprecedented number of natural disasters to the Caribbean, Mexico, and the U.S. For some of our clients, you have been in the cross hairs of two hurricanes that have slammed both Florida and Texas. It’s been a tough September, hasn’t it? On top of that, as for your portfolio, wasn’t this supposed to be the month where the market corrected, as many had predicted?
JUNE 30, 2017
SECURING YOUR FUTURE
The other day, a group of us got together to review CORDA’s business disruption plan. What prompted this was the potential for the summer’s first storm to hit the Gulf Coast somewhere between Houston and New Orleans. As a Houston-based firm, we have to be prepared for the likely scenario of a hurricane or flood impacting our immediate area and for the possibility our main office building is damaged or closed. It had been since last year’s hurricane season that we reviewed our plan, therefore, we wanted to make sure all 19 of our employees knew their responsibilities and our back up office locations in Austin and Dallas prepared for “business as usual” in the case we had to re-locate on a moment’s notice.
MARCH 31, 2017
A HOUSE OF STEEL
Last quarter’s letter focused on the unpredictability of the political process and a Federal Reserve in a gradual tightening mode and how the seasoned investor could set herself/himself up to win against unusual forces of volatility in the coming years. The culprits of the expected volatility include political and monetary forces, terrorism, economic growth or stagnancy, changes to the environment, and a host of other events that can move the markets on any given day.
JANUARY 5, 2017
PREDICTABLY UNPREDICTABLE
As we head into a New Year, we are prone to reflect on the past and it seems somewhat mandatory to drag out our crystal ball to help set a course for the upcoming year. Our customary optimism about owning high quality, cash flowing, and shareholder friendly businesses at the right price is a permanent feature to our investment plan, virtually set in stone. However, you can be assured we maintain a cautious mindset about how to deploy capital in an ever changing environment.
SEPTEMBER 30, 2016
EFFECTS OF ELECTIONS
“I think that you will all agree that we are living in most interesting times. I never remember myself a time in which our history was so full, in which day by day brought us new objects of interest, and let me say, new objects of anxiety.” Joseph Chamberlain, 1898.
JUNE 30, 2016
BREXIT, TOP GOOGLE SEARCHES, AND SUB ZERO INTEREST RATES AROUND THE GLOBE
It seems nobody was looking for the Brexit vote to go the way it did last week. Immediately following the vote, we were shocked to read (or were we?) the most searched phrases on Google in the U.K. were: “What is the EU?” and “What does it mean to leave the EU?” So even after the votes were counted, it seems many weren’t quite aware what they may have voted for in the first place!
MARCH 31, 2016
LESSONS FROM THE PAST 12 MONTHS
Lately, the market has been more volatile than ever, it seems. Last August, and most recently in January, the stock market suffered some fairly substantial drawdowns. What did you learn from those two experiences?
JANUARY 11, 2016
VALUE VERSUS GROWTH
There is a quote from Benjamin Graham, the father of value investing, that comes to mind when considering the price action of the stock market. He said; “Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
OCTOBER 1, 2015
UNDERSTANDING PERMANENT LOSS OF CAPITAL
Almost every American investor has seen the film, “It’s a Wonderful Life.” The film stars James Stewart as George Bailey, a man who has given up on his dreams in order to help others and whose imminent suicide on Christmas Eve brings about the intervention of his guardian angel, Clarence Odbody, played by Henry Travers. Clarence shows George all the lives he has touched and how different life in his community of Bedford Falls would be had he never been born.
JUNE 30, 2015
VALUE AND DIVIDEND INVESTING, FOREVER
The secret to growing wealth was spelled out by Benjamin Graham over seventy five years ago when he wrote, “The real money in investing will have to be made – as most of it has been in the past – not out of buying and selling, but out of owning and holding securities, receiving dividends and interest, and benefiting from their long-term increase in value.”
APRIL 6, 2015
LESSONS FROM KRAFT FOODS
One of the most common questions we have received here at CORDA over the past six months has revolved around the current price of oil and what its impact will be to the energy related businesses that we presently own, or those that we may consider for purchase one day in the future. We have a unique viewpoint on these matters because of our proximity to the many businesses in the oil and gas space right here in Texas.
JANUARY 2, 2015
SIGN-UP FOR CORDA’S QUARTERLY E-NEWSLETTER
READY TO START A CONVERSATION?
Call us at 855.439.0665 or send us a message below.
