Quarterly Commentary

In 1986, an [wpdm_package id='28947']English illustrator named Martin Handford created a character named Wally. Wally appeared in double-page-spread illustrations and displayed an affinity for situations in which lots of activity was occurring around him, so much so that it became difficult for Wally himself to be located. He always wore the same red and white striped shirt and cap, but to better camouflage him, items with a similar color scheme...

Four-letter words have always enjoyed a distinct reputation in the global lexicon. Often labeled "bad words," these well-known expletives have a harshness to them, even when used casually, and those on the receiving end of such invective will always take particular notice, as intended. Of course, all words with four letters are not four-letter words, but we do tend to put a magnifying glass on words with four letters because...

During the past 17 years, managers of endowment and foundation investment assets have experienced more than their share of events impacting their ability to achieve their investment goals. The dotcom bubble saw the NASDAQ rise 580% between 1995 and 2000 before declining by 87% over the next two years, triggering a bear market in which the S&P 500 declined 49% from its peak. This was followed in 2008-09 by the...

Since our inception over 30 years ago, Colonial Consulting has pursued one simple goal: providing exceptional investment advice and services via our nondiscretionary advisory model. Over the past decade, much of our industry has migrated to a discretionary (sometimes called Outsourced Chief Investment Officer or “OCIO”) model while we’ve elected to maintain our original focus. Yet, we have also observed a trend in which a greater number of clients are...

Predicting the impact of macro factors is one of investing’s greatest temptations. Turn on the news and topics like commodity prices, interest rates, and currencies are being discussed constantly, with pundit after pundit confidently offering commentary on how these factors are going to impact equity markets. And in the short term, sometimes they get it right. When Hurricane Harvey hit Texas and it became clear that major production and refinery...

We know great innovation when we see it. It creates the sensation of the never-before conceivable, a new idea that seems inevitable once it’s revealed but was almost unimaginable prior to its creation. Innovation, a word first used in the 15th century, refers to the act or process of introducing new ideas, devices, or methods, but we know it as an intention to not just improve the prior generation of...

It was 2013 and Marc Lore, co-founder of Diapers.com parent Quidsi, was anxious for a new venture. He had recently left Amazon, which had purchased his company for $545 million in 2010 after an escalating price war that Lore ultimately concluded he couldn’t win. He was in New York, having lunch with an investor from the well-known venture firm Accel Partners, when he pitched his new idea – an online...

Few terms grab the collective attention of citizens in a democracy more than “Marxism.” Defined loosely as a classless society, it reflects the social, political, and economic theories of its chief architect, Karl Marx, a German philosopher who collaborated with Friedrich Engels to author “The Communist Manifesto” in 1848. Marxism is often used interchangeably with the word “socialism,” an economic and political theory advocating collective ownership and administration of the...

There are many biases that can come into play when making decisions; where one lives and works, where one grew up, and the company we keep (and have kept in the past) all play a meaningful and often not readily apparent role. These biases are inherent to being human – everyone has them, and while some are self-aware enough to acknowledge them, others are not. In the work we do...

In late 2007, Warren Buffett challenged hedge fund-of-funds Protege Partners to a bet. Mr. Buffett wagered $1,000,000 that an investment in the S&P 500 would be worth more after ten years than an equal investment in five fund-of-funds selected by Protege. The market was merciless from the start, delivering a global financial crisis that provided a very strong start for the hedge fund portfolio. Fast forward to today, and Mr....