Posts by Sean Stannard-Stockton, CFA
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Value, Growth & Intrinsic Investing Revisited
21 February 2023“Growth and value are part of the same equation. Or rather growth is part of the value equation.” -Warren Buffett […] READ ARTICLE
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The Equity Anxiety Premium
18 January 2023“You’ll hear a lot of managers say, “Hey, I bought the market in the financial crisis,” but they’re probably not […] READ ARTICLE
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Ensemble Third Quarter Earnings Commentary with The Transcript
8 December 2022The Transcript is a research service that scours corporate earnings call transcripts in search of critical insights that are applicable […] READ ARTICLE
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Equity Duration & Inflation: Lessons from the Nifty Fifty
13 September 2022This is Part III of a three-part series. Read Part I here and Part II here. In the early 1970s, […] READ ARTICLE
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Equity Duration & Inflation: Viewing Stocks as Bonds
9 September 2022 This is Part II of a three-part series. Read Part I here and Part III here. “Conceptually, if you […] READ ARTICLE
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The Disconnect Between Corporate Fundamentals & Stock Prices
10 May 2022In early March we first started talking about a Stagflation Panic that we believe has gripped the market. Since then, […] READ ARTICLE
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The Risk of War to the US Stock Market
11 March 2022“At heart, uncertainty and investing are synonyms.” –The Intelligent Investor, Benjamin Graham (1949) In writing this post, we thought about […] READ ARTICLE
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Stagflation Panic Grips Stock Market
9 March 2022Executive Summary The Ensemble equity investment strategy is down approximately 22% on a year-to-date basis through March 7th 2022. Our […] READ ARTICLE
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Netflix’s Man Overboard Moment
24 January 2022“A key part of successful investing is the ability to keep emotions in check in the face of adversity. One […] READ ARTICLE
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The Critical Role of Empathy in Investing
3 January 2022“Could a greater miracle take place than for us to look through each other’s eyes for an instant?” -Henry David […] READ ARTICLE
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Forecasting Growth Part V: Category Killers & Positive Feedback Loops
8 October 2021(This is Part V of a five-part series. Part I. Part II. Part III. Part IV.) “We should not try […] READ ARTICLE
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Forecasting Growth Part IV: Beyond Base Rates
6 October 2021(This is Part IV of a five-part series. Part I. Part II. Part III. Part V.) “Not all those who […] READ ARTICLE
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Forecasting Growth Part III: Problems with Base Rates
6 October 2021 (This is Part III of a five-part series. Part I. Part II. Part IV. Part V.) “My interest is […] READ ARTICLE
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Forecasting Growth Part II: Using Base Rates
5 October 2021 (This is Part II of a five-part series. Part I. Part III. Part IV. Part V.) “[Assuming] ‘what you […] READ ARTICLE
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Forecasting Growth Part I: The Siren Song of Growth
4 October 2021(This is Part I of a five-part series. Part II. Part III. Part IV. Part V.) “Therefore, take me and […] READ ARTICLE
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Ensemble Capital’s Approach to Stakeholder Analysis
22 July 2021In recent years, the field of what was once called socially responsible investing has evolved into ESG analysis, or the […] READ ARTICLE
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Investing in a High Pressure Economy
11 June 2021You don’t have to be an economic expert to recognize that very, very big things are happening in the US […] READ ARTICLE
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Ants & Food: An Ecological Mental Model for Corporate Management
22 March 2021As the world of investing has become more quantitative, with alpha, beta and various “factor exposures” being sliced and diced […] READ ARTICLE
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Don’t Learn the Wrong Lessons from the Dot Com Crash
5 March 2021In December of 1998, a newly minted Wall Street analyst named Henry Blodget stuck his neck out and declared that […] READ ARTICLE
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Position Sizing: Marrying The Best of Qualitative & Quantitative Decision-Making
5 January 2021At Ensemble Capital, we believe that company analysis is a qualitative activity. The identification of competitively advantaged businesses, with excellent […] READ ARTICLE
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The Overton Window & Understanding What is Possible
11 November 2020“You do not need to know precisely what is happening, or exactly where it is all going. What you need […] READ ARTICLE
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Stakeholder Value: Exploitation vs Being Taken for Granted
21 September 2020“Being taken for granted is an unpleasant but sincere form of praise. Ironically, the more reliable you are the more […] READ ARTICLE
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Understanding Stakeholder Value: Where Do Profits Come From?
3 September 2020“Whatever affects one directly, affects all indirectly. I can never be what I ought to be until you are what […] READ ARTICLE
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Coronavirus: The Next Normal
26 May 2020“Change is the only constant in life.” -Heraclitus of Ephesus, 500 BCE In the years after the financial crisis, the […] READ ARTICLE
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Why Isn’t the Market Down More?
27 April 2020This is a chart of the S&P 500 over the last five years. (Source: Bloomberg) Despite the market being down […] READ ARTICLE
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Corporate Leadership in a Time of Crisis
9 April 2020In our investment philosophy framework, our evaluation of management features prominently. For every investment we make, we ask ourselves these […] READ ARTICLE
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Coronavirus: A Global Natural Disaster
18 March 2020If you look back over the last century, you’ll find three types of events that have greatly disrupted stock markets […] READ ARTICLE
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What We’re Doing About Coronavirus
10 March 2020Shortly after Coronavirus began spreading in Italy, we published our post How We’re Thinking About Coronavirus. In that post, we […] READ ARTICLE
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Business Service Stocks: Overcoming Familiarity Bias
5 March 2020Note: During times of stress, investors often lose conviction in their previously strongly held beliefs. This cracking of their conviction […] READ ARTICLE
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How We’re Thinking About Coronavirus
25 February 2020When various world news breaks that seems scary for the market, the main way we process this information is the […] READ ARTICLE
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Pick Your Poison: Implicit vs Explicit Forecasts
10 January 2020“My interest is in the future because I am going to spend the rest of my life there. ” -C.F. […] READ ARTICLE
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Who’s Scared of Google? Not Booking Holdings
20 December 2019“We built this company on pay per performance to begin with and its no secret that we did it with […] READ ARTICLE
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Position Sizing: Why So Serious?
19 December 2019This is Part 7 of our series on position sizing. The rest of the series may be found here – […] READ ARTICLE
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Position Sizing: How We Assess Conviction
12 December 2019This is Part 4 of our series on position sizing. The rest of the series may be found here – […] READ ARTICLE
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Ensemble Capital Goes to China: The Context of China’s Rapid Growth
9 December 2019This is part V in a five part series about Ensemble’s recent trip to China. Read part I for more […] READ ARTICLE
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Ensemble Capital Goes to China: The Two Chinas
6 December 2019This is part IV in a five part series about Ensemble’s recent trip to China. Read part I for more […] READ ARTICLE
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Ensemble Capital Goes to China: Social Commerce vs E-commerce
4 December 2019This is part III in a five part series about Ensemble’s recent trip to China. Read part I for more […] READ ARTICLE
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Ensemble Capital Goes to China: The Rise of Local Chinese Brands
3 December 2019This is part II in a five part series about Ensemble’s recent trip to China. Read part I for more […] READ ARTICLE
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Ensemble Capital Goes to China
23 October 2019This is part I in a five part series about Ensemble’s recent trip to China. Ensemble does not currently make direct […] READ ARTICLE
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Position Sizing: Why Conviction Matters
3 September 2019This is Part 3 of our series on position sizing. The rest of the series may be found here – […] READ ARTICLE
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“Outrageous” Profit Margins
24 July 2019“No one buys a quarter-inch drill bit because they need a quarter-inch drill bit. What they need is a quarter-inch […] READ ARTICLE
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Position Sizing: Research Stages
18 July 2019This is Part 2 of our series on position sizing. The rest of the series may be found here – […] READ ARTICLE
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Trade Wars & Recessions: Investing Under Conditions of Uncertainty
30 May 2019“At heart, uncertainty and investing are synonyms.” –The Intelligent Investor, Benjamin Graham (1949) Investors hate uncertainty. You hear it almost […] READ ARTICLE
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How Many Stocks Should You Own In Your Portfolio?
22 April 2019This is Part 1 of our series on position sizing. The rest of the series may be found here – […] READ ARTICLE
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The Risk of Low Growth Stocks Part 4: The Risk of the New Normal
8 April 2019(This is Part 4 of a four part series. Part 1, Part 2, and Part 3) In the previous parts […] READ ARTICLE
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The Risk of Low Growth Stocks Part 3: Heighten Risk to the Best Companies
4 April 2019(This is Part 3 of a four part series. Part 1, Part 2, Part 4.) In Part 1 and Part […] READ ARTICLE
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The Risk of Low Growth Stocks Part 2: Prestige Brands Case Study
27 February 2019(This is Part 2 of a four part series. Part 1, Part 3, Part 4.) In our post last week […] READ ARTICLE
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The Risk of Low Growth Stocks Part 1: Stall Speed
22 February 2019(This is Part 1 of a four part series. Part 2, Part 3 and Part 4.) “When you stop growing […] READ ARTICLE
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Why We Might Not Have A Recession… For a Long Time
1 February 2019Back in August, we wrote about how the New Normal economy, featuring low growth, that had persisted for a decade […] READ ARTICLE
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Sean Stannard-Stockton’s Sensata Technologies Presentation
28 January 2019Earlier this month I had the pleasure of doing a presentation on our investment thesis for Sensata Technologies at MOI […] READ ARTICLE
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The Myth of Uber for X
25 January 2019One of the most basic (both in the sense of “simple” as well as the slangy put down) start up […] READ ARTICLE
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The Market Decline of 2018 & What Comes Next
26 December 2018“Everyone I know that has accumulated wealth, whether it’s Warren Buffett, Ken Langone, Mario Gabelli, made their fortunes out of […] READ ARTICLE
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Talking About the Millennial Generation
19 November 2018People try to put us down Just because we get around Things they do look awful cold I hope I […] READ ARTICLE
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Strong Evidence of Rare Events: False Positives in a Sea of Noise
2 November 2018Investors are suddenly grappling with the possibility that the economic expansion is nearing its end and a recession could be […] READ ARTICLE
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We’re a Long Way From Neutral… Probably
17 October 2018On October 3rd, Fed chairman Jerome Powell told PBS’s Judy Woodruff: “We’re a long way from neutral at this point… […] READ ARTICLE
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Technology is Dead, Long Live FAANG
23 September 2018“I did mention one thing at the meeting, which I don’t think people appreciated at all… So you have close […] READ ARTICLE
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The End of the New Normal Economy?
23 August 2018In the early years of the Great Recession, PIMCO economists coined the phrase the “New Normal.” The New Normal posited that […] READ ARTICLE
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The Sociological & Psychological Hurdles for Self Driving Cars
20 March 2018From the Planet Money Podcast: “When elevators were first invented, they were like cars – big things that could kill […] READ ARTICLE
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The Death of (Many) Brands Part II: The Rise & Risks of the Concierge Brand
16 March 2018In August of last year we published a piece titled The Death of (Many) Brands in which we argued that […] READ ARTICLE
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Warren Buffett’s Most Dangerous Advice
14 February 2018“Rule #1: Never lose money. Rule #2: Never forget rule #1.” -Warren Buffett Warren Buffett’s “Rule #1 and #2” hold […] READ ARTICLE
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Todd Wenning, CFA Joins Ensemble Capital Management
18 December 2017I’m excited to announce that Todd Wenning, CFA has joined Ensemble Capital as a senior investment analyst. Todd is an […] READ ARTICLE
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Pricing Power: Delighting Customers vs Mortgaging Your Moat
29 November 2017“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices […] READ ARTICLE
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Building Arks, Rather Than Trying to Predict The Rain
21 November 2017Guy Spier is the author of the excellent book The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, […] READ ARTICLE
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Ensemble Capital Client Call Transcript: First American Financial (FAF)
24 October 2017We recently hosted our quarterly client conference call. You can read a full transcript HERE. Below is an excerpt from the […] READ ARTICLE
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Ensemble Capital Client Call Transcript: Apple Update
20 October 2017We recently hosted our quarterly client conference call. You can read a full transcript HERE. Below is an excerpt from the […] READ ARTICLE
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Living in a Cloud of Possibilities
29 September 2017“Reality is a cloud of possibilities, not a point.” -Amos Tversky Amos Tversky is one of the most important economic […] READ ARTICLE
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The Bubble Investors Least Expect
20 September 2017For much of the past seven years, various stock market pundits have been declaring that the stock market is wildly […] READ ARTICLE
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The Death of (Many) Brands
30 August 2017Brands are a key source of value for many companies. But while brands might seem a natural part of the […] READ ARTICLE
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A Bidding War for Advisory Board Company
18 July 2017The post below is an excerpt from the recent ENSEMBLE CAPITAL QUARTERLY CONFERENCE CALL. You can read the full transcript HERE. I’d […] READ ARTICLE
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Is The Stock Market Overvalued?
17 July 2017The post below is an excerpt from the recent Ensemble Capital quarterly conference call. You can read the full transcript […] READ ARTICLE
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Failing at Economic Forecasting
29 June 2017“He who sees the past as surprise-free is bound to have a future full of surprises.” – Amos Tversky We’ve […] READ ARTICLE
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Warren Buffett Declares New Phase of His Investment Philosophy
16 May 2017Warren Buffett is generally credited as the most successful investor of all time. But those seeking to learn from him […] READ ARTICLE
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Ensemble Capital Client Call Transcript: Oracle
27 April 2017We recently hosted our quarterly client conference call. You can read a full transcript here. Below is an excerpt from […] READ ARTICLE
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Ensemble Capital Client Call Transcript: Market & Economic Comments
25 April 2017We recently hosted our quarterly client conference call. You can read a full transcript here. Below is an excerpt from […] READ ARTICLE
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Owner-Operators & Shareholder Value Creation
12 April 2017“Never, ever, think about something else when you should be thinking about the power of incentives.” – Charlie Munger During […] READ ARTICLE
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How Moats Make a Difference
4 April 2017In our writing here we’ve made clear the the single most important element of our investment approach is focusing on […] READ ARTICLE
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Advisory Board Company: Reducing the Cost of Health Care & Improving Patient Outcomes
16 March 2017In our post on the threats and opportunities facing health care investors in the decade ahead, we described the way […] READ ARTICLE
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The Market Rally & Inflation Expectations
1 March 2017One way to think about the market rally may be just to focus on inflation. Most objective political observers say […] READ ARTICLE
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Update on the Ensemble Fund (ENSBX)
7 February 2017Most of the posts here at Intrinsic Investing focus on the portfolio holdings of Ensemble Capital and our investment philosophy. […] READ ARTICLE
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Investing in Health Care: The Threat & Opportunity of The Decade Ahead
19 January 2017If you invest in any health care related company today, you have to prepare for less and less money being […] READ ARTICLE
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Ensemble Capital Quarterly Call Transcript
6 January 2017Yesterday we hosted our quarterly conference call. On the call, we discussed the implications of the U.S. presidential election and […] READ ARTICLE
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Excessive Diversification Is Pointless & Damages Returns
1 December 2016Most people think that if something is good, more is always better. But that’s rarely true. One of the most […] READ ARTICLE
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Stocks Going Every Which Way Since The Election
21 November 2016Despite the fact that individual companies, industries, and sectors have different fundamentals and outlooks, most of the time stocks trade […] READ ARTICLE
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Predicting The Long-Term is Easier Than Predicting The Short-Term
14 November 2016One of the more counterintuitive things about forecasting the future is that long-term trends are generally easier than short-term trends […] READ ARTICLE
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Interpreting Warren Buffett
31 October 2016Every great investor has learned from the greats that came before. Reading Benjamin Graham, Warren Buffett, Charlie Munger, Phil Fisher and […] READ ARTICLE
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Time Warner Deal Implies Company Throwing in the Towel
22 October 2016Multiple news sources are reporting that Time Warner is on the verge of agreeing to be purchased by AT&T for about […] READ ARTICLE
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Questions About ROIC & Valuation
18 October 2016Recently, Arif and I had the pleasure of meeting with Raj, the very insightful author of the Scuttlebutt Investor blog. Scuttlebutt […] READ ARTICLE
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Ensemble Capital Third Quarter Client Conference Call
6 October 2016Yesterday we hosted our third quarter client conference call where we talked about our views on recent market action, the […] READ ARTICLE
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First Republic: A Customer Service Franchise Disguised As A Bank
4 October 2016Unlike most asset managers, at Ensemble Capital we don’t use financial data screens as part of our idea generation process. […] READ ARTICLE
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The Fed Thinks You’ll Lose Money in Bonds
28 September 2016When the Federal Reserve Board meets, most of the media attention is focused on whether or not it has made […] READ ARTICLE
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The Sustainability of Growth vs Return on Invested Capital
21 September 2016Previously we looked at the ways that growth, as well as return on invested capital (ROIC), drive PE ratios. Our […] READ ARTICLE
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ROIC vs Growth: What drives PE Ratios?
1 September 2016Most investors are familiar with PE ratios as a basic approach to valuing stocks. But what drives PE ratios? Why […] READ ARTICLE
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WD-40: A Case Study of the Bubble in “Safe” Stocks
24 August 2016We believe that one of the biggest risks in the stock market today comes from investors overpaying for conservative, income-generating […] READ ARTICLE
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With Unemployment Below 5%, Is There Still Slack In The Job Market?
5 August 2016Recently a client asked us about the idea that the “real” unemployment rate is higher than the reported unemployment rate […] READ ARTICLE
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What Political Forecasters Can Teach Us About Investing
3 August 2016In 2008, Nate Silver accurately forecasted the outcome of the presidential election as well as which way 49 out of […] READ ARTICLE
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How Investors Turn Long-Term Investing’s Tax Advantage Into a Disadvantage
25 July 2016We believe that one of the biggest mistakes that long-term investors make is ignoring their selling discipline due to their […] READ ARTICLE
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Landstar Systems: A Trucking Cash Machine
13 July 2016Landstar Systems (LSTR) is a trucking logistics company that we’ve owned in various size for the last five years and […] READ ARTICLE
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$2.8 Trillion Missing from US Economy
3 June 2016The chart below shows real GDP (GDP adjusted for inflation) overlayed on a 3.1% trend rate. It shows how from […] READ ARTICLE
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How The Financial News Can Blind You
20 May 2016The video below is a rather amazing demonstration of what we’re about to discuss in this post. Give it a […] READ ARTICLE
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Management Comments on TransDigm’s Moat
11 May 2016When we talk about a company having a “moat” we’re referring to the competitive dynamics that reduce the ability for […] READ ARTICLE
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Return on Invested Capital: Why It Matters & How We Calculate It
12 April 2016We received a lot of positive feedback on our recent write ups of Broadridge Financial and Sensata Technologies. We’re pleased […] READ ARTICLE
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Sensata Technologies: Auto Safety, Fuel-Efficiency & Emissions Control
4 April 2016Sensata Technologies (ST) provides sensors to essentially all of the world’s automakers to make cars safer, more fuel-efficient, and less […] READ ARTICLE
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Ignoring the Siren Call of Market Forecasts
21 March 2016With the S&P 500’s year to date return turning positive with last week’s rally, it is important for investors not […] READ ARTICLE
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Quality Companies vs Cheap Stocks
8 March 2016In our post explaining the concept of intrinsic investing we said that we rarely describe our approach as “value investing” […] READ ARTICLE
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Broadridge Financial Solutions: A Cash Producing, Mission-Critical Business Services Company
1 March 2016“We fundamentally believe that the cash we generate is our stockholders’ cash. We are committed to investing this capital to […] READ ARTICLE
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Gambling vs Investing
22 February 2016One of the concerns that clients express about investing in the stock market is their worry that it represents a […] READ ARTICLE
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Investing Takes True Grit
8 February 2016“Grit is passionate perseverance of long-term goals, even in the face of frustration and failure.” – Philip Tetlock Philip Tetlock’s […] READ ARTICLE
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Platform Value, Value Creation & Capital Allocation
1 February 2016Our friend over at the Punch Card Investing blog has a great post up discussing what Bill Ackman has called […] READ ARTICLE
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Simplicity Beats Complexity in Investing
25 January 2016“I wouldn’t give a fig for the simplicity on this side of complexity, but would give my life for the […] READ ARTICLE
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Wonderful Companies
19 January 2016“We have to have a business with some intrinsic characteristics that give it a durable competitive advantage… It’s far better […] READ ARTICLE
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Market Trivia & Investing vs Speculating
11 January 20162016 has started off with the first week showing a sharp decline in the stock market. So sharp in fact, […] READ ARTICLE
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Value, Growth & Intrinsic Investing
5 January 2016“The “intrinsic value” of a security is the maximum price that an investor would be willing to pay to own […] READ ARTICLE
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Introducing Intrinsic Investing
31 December 2015Since 1997, Ensemble Capital has built focused investment portfolios and provided wealth management advice to families and charitable institutions. Along the way, we've found that by maintaining an open dialog with our clients, we’ve helped them build conviction in our investment process, which allows them to stick through the rough patches and benefit from long term returns. Just as importantly, we’ve founded that this running dialog with our clients greatly enhances our own thinking. So today we’re happy to launch Intrinsic Investing, a publication of Ensemble Capital. Our hope is that we can build a community of readers with whom we can jointly enhance our thinking on investing. While our private clients are used to regularly interacting with the people handling their account, getting regular portfolio updates and otherwise building a relationship of trust that gives them conviction in our investment process, many investors get little of this access. We believe that social media offers an untapped opportunity for wealth management and asset management firms to build relationships of trust with their investors. This belief comes from my own experience writing Tactical Philanthropy from 2006-2011. Ensemble Capital has long had a focus on serving charitable institutions and philanthropic families. With Tactical Philanthropy, I built a community of 25,000 monthly readers, wrote a regular column for the Financial Times and became a frequent commentator on philanthropic trends in publications such as the Wall Street Journal and New York Times. The big lesson I drew from writing Tactical Philanthropy was that there is nothing like regularly publishing your ideas to refine and enhance your thinking. I also learned that conviction in an idea, one of the most underappreciated elements of a successful investment process, is built through gaining a full understanding of a concept (both the positives and the negatives). We think that building conviction in our portfolio holdings and helping our investors build conviction in our process is key to successfully navigating the investment landscape over the long term. We hope that Intrinsic Investing can be a tool for pursuing that goal. With Intrinsic Investing, we plan to enhance the communication we have with our private clients and build a larger conversation with the broader investment community. With Tactical Philanthropy, we saw firsthand the power of social media to build true community and enhance our thinking through engaged conversation. We think Intrinsic Investing can offer a similar experience. READ ARTICLE
