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Straightforward Investing Since 1969

The investment advisory firm of O’Brien Greene & Co. provides independent investment management to a diverse clientele. Individuals, families, and corporate retirement plans make up the majority of clients, although longtime clients also include trusts, insurance companies, and charitable endowments. We seek the preservation and growth of capital through good and bad markets, and our investment strategy emphasizes several themes: simple, transparent, separate accounts; direct ownership of high-quality stocks and investment-grade bonds; diversification across the market; customized portfolios with a high degree of personal attention. The firm has more than $270 million under management and its offices are located in suburban Philadelphia in the borough of Media, Pennsylvania.

Review & Outlook

Our take on the investing, financial, & economic themes of the day

Reaction to Falling Oil Prices

5 December, 2014 by Mark O'Brien in Commentary
The price of oil has collapsed from about $106 a barrel at the start of the third quarter to about $65.50 a barrel today.  That’s a big move.  Were prices to stay down, the consequences could be equally big. Junk bond funds probably have the most exposure, at least in the short term.  As much as 17% of the junk bond market is energy related.  In 2006 the number was much lower, in the 6% range.  In  recent years there’s been a surge in issuance of bonds to pay for new drilling projects, especially those related to fracking. If the price of a barrel of oil  falls below the cost of producing it,  well, you know the rest.  It is not good for the marginal producers or their debt, much of which makes up the typical junk bond fund. What’s the upside to the oil story?   The biggest beneficiaries would be companies that use oil.  One thinks of airlines, like Spirit (one of our small-cap stocks), railroads like Union Pacific, logistics/shippers like UPS and FEDEX, and food distributors like ... read more...

Your 401(k) Plan: Maybe the Most Tedious & Consequential Problem You’re Not Dealing With

18 November, 2014 by Matthew O'Brien, Ph.D. in Commentary
Below is a round-up of current 401(k) plan news.  First, however, I must acknowledge that the subject of 401(k) plans is intrinsically tedious and boring.  Think of how many more pressing problems or interesting issues there are that merit our attention.  The list is nearly endless.  For me, however, the subject of 401(k) plans has become extrinsically very interesting.  Why?  Because the tedium of researching and understanding a 401(k) is responsible for making Wall Street a lot of money at the expense of ordinary retirement investors. This presents a opportunity for me and my firm, because our business model in the retirement plan arena is to act as a fiduciary investment advisor — motivated exclusively by our clients’ best interests — and to prevent Wall Street from making a lot of money at the expense of our clients.  This isn’t all we do, of course, since our primary job is to preserve and grow our clients’ capital over the long-haul.  Avoiding ... read more...

Rethinking the Active vs. Passive Debate

12 November, 2014 by Ben O'Brien in Commentary
Josh Brown of the Reformed Broker blog linked yesterday to an interesting interview in the Wall Street Journal with mutual fund expert David Snowball who addresses the active versus passive investment debate: WSJ: Active or passive? Do today’s fund managers face an insurmountable challenge in beating quantitative systems? MR. SNOWBALL: “Passive” doesn’t exist. The closest we come to it is Voya Corporate Leaders Trust (LEXCX). Otherwise, it’s a fantasy woven by marketers and advisers. Index funds represent portfolios of stocks selected by flawed, conflicted and occasionally dunderheaded human beings. The Dow and S&P 500 are both good examples of portfolio by committee. I suspect a better dichotomy is this: disciplined, cost-effective portfolios versus undisciplined, cost-maximizing ones. Many but not all passive products fall in the former. Many but not all active products fall in the latter. Those observations underlie our conclusion that 80% of all funds, active and passive, ... read more...

Nontransparent Actively Managed ETFs: Another Wall Street Solution in Search of a Problem?

7 November, 2014 by Matthew O'Brien, Ph.D. in Commentary
The Wall Street Journal reports that the SEC has approved a proposal from fund company Eaton Vance to offer actively managed exchange-traded funds (ETFs) that don’t automatically track an index and don’t disclose their holdings day-to-day.  Apart from a few actively managed bond ETFs, fund companies have avoided offering actively managed strategies through ETFs because their disclosure requirements would allow other market participants to front-run the trades of active ETF managers.  This problem doesn’t arise for mutual funds, because they are only required to disclose their holdings quarterly. It should be noted that the problem of front-running ETFs isn’t really unique to an actively managed strategy.  Last year Bloomberg reported that some managers were worried about big banks taking advantage of the predictable rebalancing needs of passively managed ETFs (like SPY, the oldest and biggest ETF that tracks the S&P 500 Index) by offering unfavorable ... read more...

What We’re Reading: November 5

5 November, 2014 by Matthew O'Brien, Ph.D. in Commentary
Wednesday’s Links U.S. Earnings Beat Estimates at Fastest Pace in 4 Years (Bloomberg) Ultralow Inflation Hits Europe in Different Ways, Complicating Fix (WSJ) New Oil Shipment Shows Cracks in U.S. Export Ban (WSJ) When Stock Buybacks Are Not a Waste of Money (Harvard Business Review) EOG Resources Posts Higher Profit and Revenue (WSJ) Tesla Skeptics Make Musk Dyspeptic (WSJ) Gas now cheaper than milk (Fox) Chart of the Day read more...