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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

Buying Opportunities from the Brexit Sell-Off

U.S. markets have been up strongly yesterday and (thus far) today, as have British and European markets.  Are there buying opportunities among the stocks that sold off sharply on Friday and Monday? Fewer than you might think.  The selling on Friday and Monday wasn’t indiscriminate, and it’s indiscriminate selling that creates opportunities.  Not everyone understands this, including the headline editors at the WSJ.  Consider the curious subtitle from a WSJ piece the other day by Spencer Jakab titled “Are There Bargains Among the ‘Brexit’ Wreckage?”.  The subtitle read, “Not all stocks were equally hit when the U.K. voted to leave the European Union, but that doesn’t necessarily mean a buying opportunity.”  The implication is that an unequal stock sell-off would mean that there were buying opportunities.  This seems exactly backward: if stocks were equally hit when the U.K. voted to leave, then there would be obvious buying opportunities, because ... read more...

Brexit may not inhibit LSE/Deutsche Börse Tie-Up

Here’s another piece of evidence for thinking Brexit may not hurt UK companies as much as many think: although there are uncertainties about what final shape the deal will take, the Brexit vote hasn’t even deterred the proposed merger of the London Stock Exchange Group and the Deutsche Börse, according to the WSJ today. read more...

Britain’s fortunes

One fact that complicates my previous argument about Britain’s fortunes, post-Brexit, is the comparative underperformance of the FTSE 250, which tracks mid-cap companies.  Such mid-caps are typically less globally oriented, compared to the larger companies in the FTSE 100.  As the WSJ reports this morning, the FTSE 250 has dropped 12% since the Brexit vote, compared to the 2% drop in the FTSE 100. Nevertheless, the FTSE 250 is still outperforming European stocks for the year.  Here is the FTSE 100 (in yellow) compared to the Euro Stoxx 600 (light blue) and the FTSE 250 (dark blue): Why have stocks in the FTSE 250 done particularly badly, even if they’ve appeared to stabilize today (up 3.78%)?  The chief reason may be the heavy representation of financials–banks and real estate investment trusts.  Nearly 33% of the FTSE 250 is made up of financial companies: The FTSE 100, by comparison, is comprised of just 17% financials.  Financials have been hardest hit by ... read more...

The Fallout from Brexit: Europe is Worse-Off than Britain

Over the next few days I will summarize some of our thinking at O’Brien Greene about the fallout from Britain’s vote to leave the EU.  Let me begin with one observation. The EU needs Britain more than Britain needs the EU, and the “leave” vote is a greater threat to the economic and political future of the EU than it is to the UK. This is evident in how financial markets have responded thus far to the vote.  Last week London-listed stocks as measured by the FTSE 100 Index (affectionately known as the “Footsie”), closed up for the week.  That’s right.  Even after Friday’s sell-off in response to the “Leave” victory, London-listed stocks were up over the previous five days.  Compare the performance of UK FTSE 100 stocks (in light blue) to German stocks (the DAX Index, in dark blue) and Euro stocks generally (the Stoxx 600 Index, in yellow) shown below. Unlike the UK stock market, both German stocks specifically and European ... read more...

Evaluating Strategy and Competitive Advantage with Porter’s Five Forces

17 June, 2016 by Ben O'Brien in Commentary
Why is it that some companies grow and thrive for 50 or 100 years, while others are highly successful for just a few years before fizzling out? The answer is that some companies have a durable competitive advantage, while for others competition quickly chips away at growth and profit. In a 1979 article in Harvard Business Review professor Michael Porter introduced a framework for evaluating a company’s competitive position and strategy that came to be known as Porter’s Five Forces. The five forces help to show why a company is profitable so that you can judge whether that profitability will last. The framework has become an important tool for corporate management, consultants and investors.   In valuing a company, investors will usually try to predict whether the company’s margins will increase, decline or stay the same. The five forces are a helpful tool for this part of valuation. The framework helps you hone in on the company’s strategy as well is ... read more...