Author Archives: Edward A. Studzinski

About Edward A. Studzinski

Ed Studzinski has more than 30 years of institutional investment experience. He was a partner at Harris Associates in Chicago, Illinois. Harris is known for its value-oriented, bottom-up investment approach that frames the investment process as owning a piece of the business relative to the business value of the whole, ideally forever. At Harris, Ed was co-manager of the Oakmark Equity & Income Fund (OAKBX). During the nearly twelve years that he was in that role, the fund in 2006 won the Lipper Award in the balanced category for "Best Fund Over Five Years." Additionally, in 2011 the fund won the Lipper Award in the mixed-asset allocation moderate funds category as "Best Fund Over Ten Years. Concurrently Ed was also an equity research analyst, providing many of the ideas that contributed to the fund’s success. He has specialist knowledge in the defense, property-casualty insurance, and real estate industries, having followed and owned companies as diverse as Catellus Development, General Dynamics, Legacy Hotels, L-3, PartnerRe, Progressive Insurance, Renaissance Reinsurance, Rockwell Collins, SAFECO, St. Joe Corporation, Teledyne, and Textron. Before joining Harris Associates, over a period of more than 10 years, Ed was the Chief Investment Officer at the Mercantile National Bank of Indiana, and also served on their Executive and Asset-Liability Committees. Prior to Mercantile, Ed practiced law. A native of Peabody, Massachusetts, he received his A.B. in history (magna cum laude) from Boston College, where he was a Scholar of the College. He has a J.D. from Duke University and an M.B.A. in marketing and finance, as well as a Professional Accounting Program Certificate, from Northwestern University. Ed has earned the Chartered Financial Analyst credential. Ed belongs to the Investment Analyst Societies of Boston, Chicago, and New York City. He is admitted to the Bar in the District of Columbia, Illinois, and North Carolina.

Not in Kansas Anymore!

By Edward A. Studzinski

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the things you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover.”    Mark Twain

With June, we have had the coming of another Morningstar Conference. Repeatedly I studied the agenda. I could not see anything I thought worth hearing. Rather than presenting many of the leading investment professionals of the mutual fund world, this year the key seemed to be Continue reading →

Active Value versus Indexation – Godzilla versus the Smog Monster

By Edward A. Studzinski

The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently.

 Nietzsche

Some years back my colleague Clyde McGregor and I used to have philosophical discussions about the market positioning of our fund, the Oakmark Equity and Income Fund (OAKBX), vis-à-vis our competitors. And while some of our focus was on fees, most of the Continue reading →

Rolling Down the Appian Way

By Edward A. Studzinski

“To succeed in the world, it is not enough to be stupid, you must also be well-mannered.”

Voltaire

There is a show on Showtime cable that purports to give a pretty good reading of the world of hedge funds and their masters, called “Billions.” It is now into its third season. A scene in the third episode of this season resonated with me regarding some of the issues and problems that active managers face today. The main character, Bobby Axelrod of Axe Capital, has surrendered his rights to trade as a hedge fund manager/chief investment officer in return for having his personal capital unfrozen and thus accessible. His successor as Chief Investment Officer at the firm, Taylor Mason, has begun a search to find some quantitative managers that can be brought into the firm, hoping they will be additive to the Continue reading →

Popping the Balloon

By Edward A. Studzinski

“We live in an age of great events and little men.”

       Winston S. Churchill

We have made it through another month, and another quarter. It was not quite so painless for either investors or money managers, as year to date the S&P 500 has now dropped into negative territory. Volatility is clearly back. And while active managers made a valiant effort during the last week of the quarter to move the averages back up into positive territory, it was not to be.

What comes next? Stocks are Continue reading →

It Was the Best of Times ……

By Edward A. Studzinski

“I have to change to stay the same.”

Willem de Kooning

Horses for Courses

One of the columnists I have a great deal of time for is John Authers, who writes the “Markets Insight” column for the Financial Times of London. On 22 February, his column discussed the publication of this year’s edition of the Global Investment Returns Yearbook produced annually for Credit Suisse by the Elroy Dimson, Paul Marsh, and Mike Staunton. Historically they have looked at Continue reading →

What You See …

By Edward A. Studzinski

“If you can’t annoy somebody, there’s little point in writing.”

       Kingsley Amis

These days, given the continuing march of new highs in the market indices, coupled with the ongoing extremes of most valuation metrics on individual securities, there is not a lot for a conservative investor to say that hasn’t been said before. What is different this time is the continuing flight from higher fee investment vehicles by both retail and institutional investors. And that money is flowing either into exchange-traded Continue reading →

Conflicts and Contradictions

By Edward A. Studzinski

“Success is never final. Failure is never fatal. It is courage that counts.”

        Winston S. Churchill

Some time ago, I was surprised by a conversation with my colleague Charles, finding him quite incensed about a visit he had made to a money manager, one of a series of such encounters that began at the Morningstar conference this year. It appears to have been a disconcerting discovery to Charles that the firm in question, rather than lowering their fees, which fell somewhat on the high side, preferred to keep the fees high so as to support the high life. Charles would define the high life as expensive office space in the high-rent district, along with a propensity for displays of Continue reading →

Rearranging the Deck Chairs

By Edward A. Studzinski

“In wars then let our great objective be victory, not lengthy campaigns.”

                  Sun Tzu, The Art of War

Another year-end is in sight. Those of us who have been conservative in our asset allocations and predicting the end of the world have once again it seems, been proven wrong. Or perhaps not, for as the market keeps rising, the breadth keeps getting narrower. Or least it had been. It begs the question of whether we are setting up for a blow-off, heading straight up through year-end, or something else.

Attached is a Continue reading →

Fall Frolics

By Edward A. Studzinski

“Maybe this world is another planet’s hell.”

                                 Aldous Huxley

Investment Committees and Performance

We are at that point in time when investment returns trickle in from the endowments of schools and other not-for-profit organizations for their fiscal years ending June 30, 2017. In terms of preliminary numbers, the top ten college/university endowments had total returns Continue reading →

“One for the Gipper”

By Edward A. Studzinski

“There is much to be said in favor of modern journalism. By giving us the opinions of the uneducated, it keeps us in touch with the ignorance of the community.” Oscar Wilde

A recurring theme in investment letters, usually when one suspects that performance or personnel issues (often directly related) need to be glossed over, is a discussion about the need to have “team players” in the investment management and research process. Now there were hedge funds, such as Tiger Management in its heyday and Maverick Capital which used to make a virtue of recruiting former athletes in high school or Continue reading →