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Research

Essays and research, newest first

  1. XLV 24 December 2024 The Economics of Active Management In his paper, “The Nature of the Firm”, Ronald Coase proposed that firms exist because there are transaction costs to organising economic activity through the price mechanism such…
  2. XLIV 15 October 2024 Nucor, Executive Compensation and Dividends Initiated on the 15th of October 2024, this position was closed on the 4th of April 2025 with a total shareholder return (TSR) of -31.3%, a victim of…
  3. XLIII 9 October 2024 Steel Your Portfolio With CMC Initiated on the 9th of October 2024, CMC, a victim of market mayhem and concerns about near-term profitability, the position was closed on 4 April 2025, with a…
  4. XLII 4 September 2024 Diamond Hill is Undervalued Regardless of Challenges to its Growth and Profitability I published an update on this investment thesis on 23 December 2024 on SumZero. Opened on the 4th of September 2024, the position was closed on the 31st of…
  5. XLI 15 August 2024 Meta Platforms: Its Economics and Valuation Amidst a global stock sell-off, Meta Platforms' Q2 earnings proved an excellent redoubt, reminding investors of the firm’s remarkable growth and profitability. If Mark Zuckerberg’s present dalliance with generative AI turns out to be a more expensive reenactment of his foray into the metaverse, the company will still be in rude health. There are few firms on the planet that can take the risks Meta can, and few are led by a founder as successful as Zuckerberg. Nevertheless, an analysis of its economics and price-implied expectations embedded into its current, $515.45/share stock price, reveals the most rose-tinted expectations. There is a little suggestion that Meta's financial health is threatened, or that its competitive position is imperilled, rather, expectations implied by the stock price reveal downsides of 10-53%. Consequently, the company earns a “neutral” rating from me. This report should, one hopes, aid the reader in understanding Meta's economics, while leveraging the accounting adjustments I make and a reverse discounted cash flow (DCF) analysis of the business. I have also made my data completely accessible in an accompanying spreadsheet.
  6. XL 15 July 2024 Competition, Equity Preference and the Decade Ahead for the S&P 500 Using a model I built to forecast 10-year S&P 500 total returns leads to an awful number: 1.16%, the average total returns that are likely, if the predictive value of the model holds, over the 2024-2033 decade, a return lower than that available by simply investing in Treasuries. As the market scales its halcyon heights, it has become almost unsustainably high.
  7. II 24 April 2024 Uncertainty, Information and Digital Firms: a Framework for Understanding Meta Platforms and its Peers What follows is a framework for understanding digital firms, a framework that emerged as I edited an article on Meta Platforms, an article to be posted next week…
  8. I 10 November 2023 The Nature of Risk Risk is inextricably bound up with wealth destruction, and yet, risk measures are agnostic, treating risk as if investors are indifferent to gains and losses. This tortured contradiction…