Lessons Learned in 25 Years of Investing Together
Ballast Equity Management was founded in 2016 as an independent, employee-owned advisory firm by Jeff Kautz and Randy Hughes. Jeff and Randy began investing together twenty-five years ago at Perkins Investment Management, where their boss and mentor, Bob Perkins, first hired Randy in 1995 and then Jeff in 1997. The business and their careers grew. Read more ➝
Sustainability Inside November 2021 Download PDF The “Intel Inside” advertising program that began in 1991 is thought to be the most powerful cooperative marketing program in history. Intel Corporation successfully aimed its advertising toward consumers, convincing them that Intel chips were the ingredient needed to have a positive personal computing experience. Today, ESG investing is Read more ➝
A Quality Upgrade for Mid Cap Investing
Download PDF Ballast is pleased to celebrate another significant milestone, the fifth anniversary of the firm’s Quality Value Midcap strategy. Ballast’s founders, Randy Hughes and Jeff Kautz, have managed U.S. mid cap equity portfolios as a team for more than twenty years and believe this asset class to be the “sweet spot” for investors, one Read more ➝
A Valuation Framework for Beating Inflation and Creating Long-Term Wealth
We often see individual investors get stuck thinking of stocks as short-term trading vehicles. In our opinion, investors who consider themselves owners of companies rather than owners of stocks are more likely to be successful in reaching their goals. As owners, investors should not accept a return on their investment that is less than the risk-free rate plus an equity risk premium. Too often, people invest with long shot hopes of achieving short-term jackpot type returns. They forget the long-term goals of investing – beat inflation and create wealth.
Competitive Advantage Period Defending Your Castle
“Companies that generate returns on invested capital greater than its cost of capital are instrumental in achieving long-term wealth for investors. Unfortunately, companies that create wealth eventually attract competition from other companies, ultimately driving down product prices and profit margins.”
The Myth of High Beta
“Can investors forego short-term thrill for long-term reward?”
In a rational investment market, investors demand higher returns to compensate for higher risk. Therefore, one should logically expect lower returns from safer securities and higher returns from riskier securities. This has long been one of investing’s fundamental precepts. However, rational is not always an accurate description of investor behavior.
Volatility – A Key Hurdle to Building Long-Term Wealth
If I lose 20% of my money this year, but I’m up 20% next year, I’m back to even, right?”
At first glance, this may seem correct, but it doesn’t accurately reflect the effect of losses on an investment portfolio. Understanding the difference between arithmetic and geometric returns and how they relate to portfolio value is essential to understanding what volatility means to your long-term investment success.