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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

Meditating on Monday’s Sell-Off

5 February, 2018 by Mark O'Brien in Commentary
After Monday’s sell-off in stocks, I need not tell clients that the market is in the grip of a panic.   As I write, the Dow is down over 1,000 points; it fell over 600 points on Friday.  In just two days it has lost over 6% its value.  At Monday’s close, the S&P 500 was down 4.1% for the day. Monday’s trading was marked by wild price swings and sometimes panicked selling, followed by sharp upward reversals.  At times like this the best thing to do is nothing.   I am reminded of the oath that doctors swear when they begin their practice:  First,  do no harm.  And it is harm, of the self-inflicted variety, that one does in a panic, when rationality flies out the window. Another way people do harm is through the rather loose operation of math.  Thus one says to himself:  “I lost $100,000 in portfolio value today; at this rate I will be broke in 10 days. I better get out while I can.”   Another way is adding up paper losses, as if they were permanent and real. ... read more...

Ideas to De-risk, not Re-risk a Portfolio

13 August, 2017 by Mark O'Brien in Commentary
The stock market fell in price three days in a row this week.  This hasn’t happened in a long time, and we are not used to it.  Curious how little it takes to bring out the fear. So is this the start of the big one?  The answer is, it could be.  Whether a stock market correction (defined as prices down 10%), a bear market (defined as prices down 20%), something worse than a typical bear market, like the collapse of 2008-9, or something altogether better, like a resumption of the rally we have enjoyed in recent years – – you just don’t know.  These events come unannounced.  One thing is for sure, though, you cannot jump in and out of markets and expect to accomplish any benefit of a long-term nature.  You may be able to get it right once, but never double-lucky enough to get back in in time to do better than if you had just stayed put. Having said this, there are ways to “de-risk” a portfolio to mitigate the pain of a correction, a bear market, or the something worse, ... read more...

Inflation Quandaries

12 July, 2017 by Mark O'Brien in Commentary
Monday’s Wall Street Journal (July 10, 2017, page A2) contains a remarkable article. It is remarkable because it reveals the assumptions and attitudes of the experts who are trying to administer the global economy in which we find ourselves. The headline of the article provides the background: “Weak inflation vexes Central Banks.”  Anyone who has followed financial news over the last 9 years knows that  central bankers in the developed world, including the United States, are trying to kindle a measure of inflation.  That’s because the economy has been anemic, if not stagnant, and the troupe of Keynesian and monetarist central bankers think that a little inflation will get things going again.   Problem is, there is no inflation, and the central bankers have no explanation why not.  According to their models, we should have lots of inflation but we have none.  Indeed, deflation and stagnation continue to dog their best efforts to the contrary. Page three of our quarterly ... read more...

The Bizarro Market in Europe

1 June, 2017 by Mark O'Brien in Commentary
The chart below is amazing.  It originates from Bank of America’s Merrill Lynch and shows the yield of European stocks currently exceeding the yield of European junk bonds. So why do I think this state of affairs is “amazing?”  First there is one’s reaction or reactions.  In my case, at first blush, I wanted to run out and buy European stocks in order to collect the appreciation potential of stocks along with all the high current income of junk bonds.  It would appear to be the best of all possible worlds.  That was my first reaction.  My second reaction,  which emerged  upon further reflection, was one of alarm. Several years ago we had something similar here in the U.S., when American stocks yielded more than government bonds.  I had never seen anything like that, either.  But this European situation is even more extreme. Junk bonds are not government bonds.  They are called junk for a reason.   And so “normally” they have to pay a huge yield ... read more...

Thoughts on Our ‘Tranquil’ Markets

19 May, 2017 by Mark O'Brien in Commentary
“Investor fear gauge lowest since 1993,” said a recent Wall Street Journal headline (5.8.17). While I am a tad skeptical about trying to quantify sentiment (what is an “investor fear gauge” anyway?), I am prepared to accept the central thesis that investors feel pretty good right now.  There was a momentarily blip when the market sold off on Thursday of this week, apparently in response to worries about President Trump.  But on Friday the sell-off reversed itself, and in any case,  corporate earnings for the first quarter 2017 are coming in at around 14% above the year-earlier period, which is respectable and certainly more than expected. Employment continues to tick up; the government sets the statistic at 95.6%, which is close to “full employment.” To be sure, the government measures employment in funny ways (some would say phony ways), but there’s no denying the jobs picture is improving. As for stocks, they are not cheap, but neither ... read more...