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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

Technology Can’t Solve the Mystery of 401(k) Fees

A recent article in Bloomberg by Ben Silverman asks whether opaque and excessive fees in 401(k) plans can be solved by technology.  The answer, unfortunately, is a resounding no.  The article profiles an Israeli startup called FeeX which purports to analyze your 401(k) and give you recommendations about rollovers based upon cost.  The problem of opaque and excessive 401(k) fees is real, and I’ve written about it here often, but the service that FeeX offers doesn’t offer much value. First, FeeX’s algorithm will “recommend” rollover IRAs to you only from among IRA providers who will pay FeeX a referral fee for the recommendation.  This commission-based model of course limits the range of options.  FeeX isn’t really in the business of providing a service for ordinary investors, but in selling an online distribution platform and referral service to discount brokerages. Second, and more importantly, the most egregious 401(k) plans cannot be analyzed ... read more...

Investing in RULCs: A Promising yet Conservative Strategy

Your portfolio may contain REITs, MLPs, BDCs, TIPS or various other investment acronyms, but do you own any RULCs? Perhaps you’ve never heard the term. That’s probably because I coined it myself, or rather cobbled together the acronym from a phrase used by the legendary investor Benjamin Graham. RULC stands for “relatively unpopular large company”. These are major, sometimes industry-leading companies with substantial assets and often household names. But they have fallen out of favor with the investment community and sometimes the general public, giving them an attractive valuation. They have all the benefits of successful multinational companies — stability, liquidity, vast resources, access to capital, and often a global footprint — but they trade at a discount because they are somehow out of favor. Benjamin Graham described these stocks in his classic book the Intelligent Investor: If we assume that it is the habit of the market to overvalue ... read more...

When Start-Ups Take Investors’ Cash Just Because They Can

When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing. — Chuck Prince, CEO, Citigroup (June 2007) The music is still playing for “disruptive” start-up companies and their venture capital and private equity financiers, so the dancing continues.  The Wall Street Journal reports today that the co-working start-up WeWork has been valued at $10bn by its backers, including Fidelity.  A few months ago I camped out at a co-working site in Salt Lake City for a few days.  I enjoyed it and found it a great way to get work done while I was traveling and was staying in a hotel that lacked a decent library or business center.  As a business, however, its hard to see how WeWork deserves its valuation.  As the Journal article points out, WeWork is basically engaged in office rental arbitrage.  It rents office space at scale and long-term rates and sublets the space to many ... read more...

The Decline of Community Banks

The Wall Street Journal reports today on a partnership between the online consumer lending start-up Lending Club and 200 community banks around the country.  The statistic in the article that struck me was this: Community banks—those with less than $10 billion in assets—made slightly more than 75% of all consumer loans in 1990, according to SNL Financial, but that amount has plummeted to less than 9% of the market last year, with larger banks seizing that business. Much of this consolidation in the banking sector has been driven by regulatory preference for big banks (or the “capture” of regulators by big banks, to put it another way) which has only accelerated since the financial crisis and the Dodd-Frank legislation.  A few weeks ago I had breakfast with the CEO of a community bank in the Philadelphia region who told me how the increased capital requirements on big banks were unintentionally driving consumer deposits out of small banks like his, since big banks were ... read more...

Bubble Watch: From Umbrellas to Internet Finance

My previous post looked at the bubble in Chinese stocks and the decision of Vanguard and FTSE Russell, in spite of sky-high valuations, to incorporate such stocks into their emerging market indices and funds.  Here’s a nice confirming anecdote about the Chinese rally that I came across in my weekend reading: Jicheng Umbrella, a Hong Kong-listed maker of, unsurprisingly, umbrellas, revealed that it is looking to get into internet finance and its stock price rose by one-quarter. What could go wrong there? As the Financial Times points out, “[o]ld economy companies [like Jicheng Umbrella] have been slipstreaming the technology rush — often with limited substance to their business models. Last year, struggling restaurant-chain operator Cloud Live announced a move into big data and cloud computing. In April, it defaulted on a redemption of part of an $80m onshore bond, only the second ever such default. The shares are now suspended. And between May and June, shares in real ... read more...