Behind the Balance Sheet #27 The Handicapper
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Oct 19, 2023 Bill Smead, an experienced investor, shares his philosophy of buying high-quality stocks that are undervalued. He predicts a downturn in the stock market and discusses out-of-favor sectors and demographic trends. He also offers insights on greyhound handicapping and the challenges of working with family members in the industry.
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Smead's Investment Philosophy
- Bill Smead's investment philosophy involves buying high-quality, out-of-favor stocks.
- He maintains a concentrated portfolio with a long-term holding period.
Greyhound Handicapping
- Bill Smead’s cousins tried to professionally handicap greyhounds, inspiring his interest.
- He developed five key variables for greyhound racing: class, early/late speed, post position, and recent performance.
Asset Allocation Analogy
- Smead compares stock picking to greyhound racing, where odds and perceived value play a crucial role.
- He cites David Swensen’s success at Yale, attributing it to diversifying into undervalued asset classes.