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    Who We Are

    About O'Brien Greene and Our History
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    Philosophy

    Straightforward investing with O’Brien Greene
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    Working with O’Brien Greene

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

What’s the Truth Behind All the Beautiful Pie Charts?

When an investor brings his portfolio to a new money manager or broker for advice, he naturally wants to know: what would you do differently than the guy who’s currently managing my money?  The imperative to answer this question has given rise to an arms race in portfolio analysis technology, in order to enable mangers and brokers to deploy beautiful pie charts about global diversification, tactical weightings, asset-class style boxes, and so on, which will show why the prospective client’s portfolio is lacking in some “crucial” respect that, happily, the new manager or broker can fix. Here’s an example from a piece of bank research recently sent to me by a bond broker. I’m not sure who at the bank is responsible for such beautiful elegance, but it’s worthy of the Yale statistician Edward Tufte, who is legendary in the graphic design world for crafting displays of “beautiful evidence.” This tactical asset allocation chart is ... read more...

The Use and Misuse of Investment One-Liners

10 March, 2016 by Ben O'Brien in Commentary
“Brevity is the soul of wit,” said Shakespeare. Well, actually he didn’t quite say it himself but put it in the mouth of one of his characters Polonius in Hamlet. Polonius was a great dispenser of one-liners. He also said “To thine own self be true” and “neither a borrower nor a lender be.” However, Polonius was also a decidedly unreliable figure. He was a bit of a windbag, and a conniving and ineffective character in the play. So what is Shakespeare trying to say about these one-liners? Giving memorable and pithy lines to so unsympathetic a figure is a typical Shakespearean move, sowing ambiguity in order to demonstrate the two-sided nature of things. Yes, one-liners can be profound, but they can also be glib, a kind of ersatz wisdom. One-liners, when misused, rather than provoking more rigorous though, act as a substitute for it. Aphorisms always walk this line. Just as in literature, one-liners are popular in the investment world. ... read more...

The Multiplication Rule of Investing

1 March, 2016 by Ben O'Brien in Commentary
When it comes to looking for good investments simplicity is a great virtue. One way of measuring the simplicity or complexity of a business is by using a fairly elementary but powerful statistical concept called the multiplication rule. According to the multiplication rule, to get the probability of a series of independent events turning out a certain way, you simply multiply the probability of each of the individual events. It is a simple but powerful idea. When you flip a coin, the probability of getting heads is .5 or 50%. The probability of getting heads twice in a row is .5 X .5 which .25 or 25%. The probability of getting heads ten times in a row is .5 to the tenth power which is .001 or .1%. The point is that if a certain outcome depends on a large number of scenarios, even if each of those scenarios is highly likely, the probability of the ultimate outcome becomes surprisingly unlikely. I first came across this idea in a great article published last year by the Indian ... read more...

Where Do Good Investment Ideas Come From?

1 March, 2016 by Ben O'Brien in Commentary
Where do good investment ideas come from? Do great investors crunch numbers and analyze data as a scientist would, or do they find sudden bursts of almost other-worldly inspiration like a poet or a painter? There is a lot of difference of opinion on this question, and there is no one right answer. Some investors have been successful with extensive, data-driven stock screening, while others tend to read widely or follow the moves of other respected investors or simply draw ideas from everyday experience or general macroeconomic trends—more like a poet than a scientist. There is a long standing division in the business world between the qualitative and quantitative, left brain and right. In fact, one of the leading websites for information on pursuing an MBA degree is called “Poets and Quants”. The Switzerland-based value investor and newsletter author John Mihaljevic recently explored this question in an article that compiled an extensive list of value-oriented investment managers ... read more...

Vanguard’s Case for Active Management: Problems with Bond Index Funds

As I’ve written previously on our blog, one of the firms that makes a strong case for the value of actively managed investment portfolios is Vanguard.  If this sounds paradoxical, it’s only because there’s a lot of public misunderstanding about what the debate over “active vs. passive” investing is really about, and because many people don’t know that Vanguard runs highly successful actively managed funds. Therefore, to borrow a motif from biblical scholarship, there’s something of a “Bogleheads of faith” vs. “Vanguard of history” phenomenon in the investing world today: according to the faith-based religion of passive index investing, there’s a battle between good (passive) and evil (active), and the good are mathematically predestined to triumph due to low fees, broad market indexes, and mean-reversion over time.  According to the actual history of fund managers like Vanguard, however, actively managed ... read more...