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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

The Unappreciated Risks of Unconstrained Bond Funds

26 February, 2015 by Matthew O'Brien, Ph.D. in Commentary
I’ve looked over dozens and dozens of 401(k) plans lately (companies must file information about their 401(k) plan with the Department of Labor, which makes the information publicly available), and one commonality that stands out is the sheer number of plans that include one of the PIMCO bond funds formerly managed by investing guru Bill Gross.  In many of the plans I looked at, the PIMCO funds served as the core fixed-income investment option.  PIMCO is now net of Gross, as the Financial Times ‘Lex’ column wittily put it, since he was pushed out of the firm last year due to erratic behavior — both his own and his funds’.  But before the “Bond King” was deposed from the company he founded, institutional and individual investors alike herded like lemmings to Gross’s funds, especially PIMCO Total Return. I highlight PIMCO Total Return because its prominence is part of a trend that has seen the growth of so-called unconstrained bond ... read more...

What Drives Economic Growth?

20 February, 2015 by Ben O'Brien in Commentary
Bank of England chief economist Andrew Haldane recently gave a well-written and wide-ranging speech “Growing, Fast and Slow” on the sources of economic growth. Haldane observes that for most of history living standards were relatively fixed. The average person in Biblical times or even much earlier did not live that differently than the average person in the 18th century. Then around the year 1800 something changed, and ever since the standard of living has been rapidly increasing (see chart below). This growth of course hasn’t come all at once and is not uniform across countries. For instance Haldane illustrates the difference in growth between Italy and China: Consider two economies – China and Italy. As recently as 1990, the aggregate annual income of these two economies was roughly equal.2 Now let’s run these economies forward, with China growing at more than 10% per year, Italy by less than 1% per year. By 2014, what do we find? Due to the magic of compound ... read more...

Should You “Buy What You Know”?

13 February, 2015 by Ben O'Brien in Commentary
The legendary mutual fund manager Peter Lynch wrote a popular investment book called One Up on Wall Street in which he argued that individual investors can use common sense and everyday experience (along with some hard work and diligence) to find great investment ideas. The book is a convincing and enjoyable read that gets you excited about investing, but is the advice accurate? The Wall Street Journal recently questioned Lynch’s advice that you should “buy what you know.” One problem according the Journal is that this approach tends to lead people to invest mainly in retail companies, an industry that most people feel as though they can understand. Retail investing, however, is prone to fads and boom and bust cycles. The article mentions a few cases in which this theory has worked, including one adviser’s pick of Williams-Sanoma (WSM) after his family started to frequent the company’s stores. The story also mentions another winner Under Armour, which ... read more...

Could the Plunge in Oil Prices Benefit Exxon?

3 February, 2015 by Ben O'Brien in Commentary
For the last few year’s the multinational oil and gas giant Exxon’s inability to capitalize on the shale drilling boom looked like a boneheaded failure. The company was going to every corner of the world, the Arctic and the bottom of the sea to find oil, while largely missing out on the boom going on right in the backyard of its Houston headquarters. Now, however, after the price of oil dropped more than 60% and many over-indebted shale drillers are in trouble, Exxon may have the last laugh. Despite the plunge in oil prices the company’s shares are roughly where they were a year ago, and the company now has a golden opportunity to buy struggling competitors on the cheap. An article in Bloomberg highlights the opportunity for Exxon: Exxon is sitting on nearly $5 billion in cash and equivalents, and while there aren’t many holes in the company’s portfolio, there is room to upgrade. The company could try to expand its footprint in the deepwater Gulf of ... read more...

Barron’s on Competitive Devaluation

2 February, 2015 by Matthew O'Brien, Ph.D. in Commentary
In my post from last week about central banks I argued that they are devaluing their currencies in a zero-sum game for stimulating their domestic economies at the expense of their trade partners.  A recent piece by Jonathan Laing in Barron’s echoes some of the same points.  Laing cites Charles and Louis-Vincent Gave of Gavekal Dragonomics, who observe that the eurozone’s trade partners are thus far interpreting the European Central Bank’s quantitative-easing program as a competitive devaluation campaign for the euro, and not really a means to bolster bank lending. If that’s the interpretation of trading partners around the globe, the ECB campaign could prove corrosive. Who ever heard of a bloc with a large current-account surplus (largely because of German export prowess) devaluing its currency? Likewise, it’s a stretch to think that weaker major partners within the euro zone—France, Spain, and Italy—will ever be able to compete on productivity with Germany. ... read more...