Vol II, No. 1

February 2014   



A monthly commentary for investors and their advisors about how the quirks of human behavior

drive investing...and what you can do about it



The Misbehaving Investor

Stock investing is all about understanding the real businesses behind each stock. 

It's also about studying the people and the culture of the business.  We have found that companies with family ownership and management tends to better align our interests with those managing the business. 

All the best,

John Feb 5  

John Heldman, CFA


Dave Hutchison, CFA
Managing Director

About Us

Triad Investment Management manages equity and balanced portfolios with a focus on research, behavior and ethics.  We invest in companies with a business-buyer's perspective.  Founded in 2008, Triad is a SEC registered investment advisor that is 100% employee owned. 


Triad has $134 million of assets under management as of December 31, 2013.  The Concentrated All-Cap Equity composite return, annualized and net of fees since inception, is 12.6% vs. 7.6% for the S&P 500 Index  (April 30, 2008 to December 31, 2013). 

For more information:
(949) 679-3991


Triad Small 1-24

All In The Family 




Boy the way Glenn Miller played  
Songs that made the hit parade.  
Guys like us we had it made,  
Those were the days.  
And you knew who you were then,  
Girls were girls and men were men,  
Mister we could use a man  
Like Herbert Hoover again.  
Didn't need no welfare state, 
Everybody pulled his weight.  
Gee our old LaSalle ran great.


-Theme song from "All in the Family" 1971-1979 (CBS)


Ah yes, the 1970's. Vietnam, Watergate, Arab Oil Embargo, Jimmy Carter, Inflation, Recession. A tumultuous time. But somehow I survived. To escape we watched All in the Family on TV. The star was Archie Bunker, head of a slightly dysfunctional family. When Archie wasn't picking on wife Edith, he was ridiculing "meathead", as he often called Mike, his college-educated son-in-law. Archie's political incorrectness created a national dialogue about previously taboo TV areas including race, gender, religion, sex, and politics. You name it, All in the Family discussed it. And, the number one TV show for six straight years from 1971 to 1976.


While All in the Family was a groundbreaking television program, and highly entertaining, the Bunker household was a poor example of family behavior as applied to investment analysis. Make no mistake, we love companies where families are involved, often due to significant stock ownership. But poor ol' Archie wasn't exactly a rational thinker. No, Archie's biases and stereotypes controlled his behavior, and often lead him to behave in illogical ways. As we often preach, rational behavior is the best way to deal with an occasionally irrational stock market.


We spend quite a bit of time analyzing businesses and the people who run them. We want to understand the people and the culture. We like heavy insider ownership. Why? Owners tend to take care of their belongings. The old adage "no one washes a rental car" comes to mind. We especially like family-controlled companies as the culture tends to be strongly biased. But unlike Archie, the bias is often rational and focused on long-term decision making and taking care of shareholders.


Examples? Warren Buffett and Berkshire Hathaway are one well-known example. But many others exist. The Tisch family and Loews Corp. Prem Watsa and Fairfax Financial. William Berkley and W.R. Berkley Corp. The Rales Brothers and Danaher Corp. Sergey Brin and Larry Page of Google. Fred Smith and FedEx Corp. Fred started FedEx in 1971 (same year as All in the Family), but unlike Archie Bunker, Fred is still running the show. We know many others, but I'm guessing you have other things to do today.  


What these companies have in common is significant insider ownership, often family-based, managed by independently wealthy people who continue to work because it's their passion, not a job. In short, these companies think like private business owners, without catering to the short-term pressures of Wall Street. That's what we love to see.


What I learned from Archie, like many children of the 70's, is how not to behave. That was his great lesson. And learning what not to do illuminates the right way forward.


Those were the days, indeed.


-John Heldman, CFA  


Past performance is not a guarantee of future results.
Results are presented net of fees and include the reinvestment of all income.


2014 Triad Investment Management, LLC