"Financial repression was what some called it. From 2008 until last year, frustrated savers and retirees lamented that artificially low interest rates deprived them of much needed income. A mere 24 months ago, $1 million invested in one-year Treasury bonds would generate a paltry $1,000 in income – enough for a careful traveller to spend a weekend in a New York City hotel. At the same time, gleeful borrowers – such as younger home buyers – were locking in historically low sub-3% 30-year mortgages, and companies like Berkshire Hathaway were borrowing for 30 years at a pittance..."

"In the words of our mentor, Brad Perry, investing is a marathon. We position your portfolios for the long-term, buying diversified, quality companies with reasonable valuations. This approach has stood you in good stead over many years. In 2022, when markets were difficult, your portfolio was resilient. However, in a marathon, sometimes there are intermediate sprints. At the time of this writing, ten of the market’s largest companies* have dashed ahead – up an average of 50% for the year – while the rest of the pack has stepped back from the starting line – down about 3%. Your portfolio is built for the long term, not for an unusual six month sprint..."

"There are times when quality and security are far less valued than excitement and sizzle … Ironically, one of the big “knocks” amongst Wall Street analysts is that the bank has been too conservative – that they have far too much in reserves and shareholders’ equity held against possible future losses… i.e., they should be more aggressive. – Marble Harbor Quarterly Letter, Third Quarter 2020

We wrote this about one of our bank investments in the fall of 2020. At that time Silicon Valley Bank (SVB) was the excitement and sizzle of the banking industry, a $300 share price on its way to $700. It now sits at zero. Clients understandably have had a lot of questions about SVB’s fall from grace and the state of the banking system in general. We thought we would share our thoughts about what happened at Silicon Valley, the state of the banking industry and how we invest in banks. ..."

"A country’s economy is a product of its population and how much each person produces, while a country’s growth is comprised of how the population changes and how efficiently that population can make things. China has many more people than the United States, but they utilize their human capital less efficiently, so China’s GDP is still lower than the United States, though for most of the last decade, their population grew, and each worker became increasingly efficient, albeit from a very low starting point..."