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Economic declines devastate the net worth of individuals globally: Global declines in net worth


We take a look at the impact of economic instability and depletion on the energy sector: report


Rolling the dice on our energy future: Matthew Simmons


We present our outlook on energy to the Park Cities Rotary club on 3.31.09: report


OPEC issues their monthly report on crude oil: Opec report


We were interviewed by James Puplava of the FSN network last Friday on the energy sector: Puplava


Warren Buffett issues the Berkshire Hathaway (BRKA) annual investor letter—and reports the worst year for shareholders in decades: 02/27/09 Berkshire Hathaway (BRKA)


Economic weakness kills energy demand, and prices, for now: Economic Weakness Kills Energy Demand


A MSN Money columnist interviews us and we discusses one of our favorite companies in the agricultural sector—and what has become one of our largest holdings: Brush column


Demand in the energy sector correlates with global economic activity—so short term we are seeing quite a bit of weakness. But longer term the sector remains attractive—energy sector


Matthew Simmons discusses the energy markets—and the problems ahead: Simmons


Is energy really a form of money? Chris Martenson has some interesting ideas in a short 10 minute presentation: Energy & the Economy


Investment banker Matthew Simmons discusses energy risks and crisis in a recent presentation: Simmons


An interesting presentation on energy yield and alternative fuels discusses some of the issues alternative fuels face—in addition to the effect of a lack of credit and low energy prices on alternative fuel development: Alternative Fuels


The relationship of the energy sector and the global economy makes a compelling story for investors—and serves to affirm our bullish long term view on the sector (video presentation):  Energy & Economy


We discuss our outlook for the energy sector in a report to our investors—is the recent weakness due to the ‘shoulder season’ or due to the economic slowdown: Shoulder season masks long term trends


We ask: Is the stock market efficient? The Market, Investments, and the ‘Efficient Market Theory’


July 1st marked the 9th anniversary of the LSGI Venture Fund L.P.  Since the structure of  the LSGI investment portfolio is essentially identical to the investment partnerships Warren Buffett and Charlie Munger ran in the 1950’s and 1960’s an interesting academic question arises:


Using the Capital Asset Pricing Model (CAPM) to review the returns for the first nine years of each partnership portfolio, which active manager has generated more ‘alpha’ (excess returns over and above that expected by the market) in the first nine years of running their partnership—(1) Warren Buffett and the Buffett Partnerships? (2) Charlie Munger and the Munger Partnership?, or (3) LSGI and the LSGI Venture Partnership?


We report our findings in a report to our investors: CAPM Report.


Forty percent of our LSGI Fund portfolio was included in the Fortune Small Business 100 list featuring 100 of the fastest growing public firms in the U.S. We recently published a study on the impact of monetary policy on the performance of small cap stocks - a topic of both academic and practical interest to our investors: MTU white paper


Who would guess that oil and gas leases would be auctioned on e-Bay? We discuss the issue with Platts: article


The Fortune Small Business 100 list was published in the July 7th issue—featuring 100 of the fastest growing public firms in the U.S. We own nine of these firms in our portfolio. And we discuss one of our favorite plays in the Fortune Small Business article: FSB 100: A Farm Equipment Maker Goes Far Afield


According to Ned Davis Research if an individual invested $1,000 in the S&P 500 index from November 1st to April 30th — the ‘winter season’ — every year from 1950 to 2006 their account would now be worth $38,799 before tax considerations. If, over the same 56 year period, an investor had invested the $1,000 in the S&P 500 index from May 1st to October 31st — the ‘summer season’ — they would have  $916. During that 56 year period an investor using this seasonality strategy would have lost money. We examine the seasonality factor over a much shorter period than Ned Davis—the last eight years—to see if the excess returns have been arbitraged away in recent years or is still present to a degree that can be exploited by investors. The results of our study can be described as stunning: Seasonality study


                                                                        Archive of interesting articles


In the April 23rd issue of Barron’s we noted that “Global demand and supply issues should push crude oil prices well above $70 a barrel by the Fourth of July. Expect fireworks in the energy sector this summer, with a potentially explosive move to the upside” At the time oil was selling at $62 a barrel more or less. It is the Fourth of July - and crude futures are at $71.41 per barrel.


Admiral Rickover, the father of the nuclear powered Navy, discusses challenges of the Fossil Fuel Age—how energy powers our society and economy — in remarkable a presentation made in 1957.


The success of our quantitative stock selection methodology in finding small, young companies with growth potential, is mentioned in the Dallas Morning News Sunday Business Section. To use an analogy we are looking for a ’Michael Jordan in grade school’. We also establish a ‘Barron’s Challenge’ scholarship for a senior finance student in the Applied Portfolio Management Program at Michigan Tech next year.


We placed second in the Professor category of the 2006 Barron’s market challenge using our LSGI screens and research—outperforming the S&P 500 index by 78.5% in a six month period. In the 2007 contest just ended we also placed second and sixth overall—out of 1,976 portfolios, outperforming the S&P 500 index by 29.0%. For our efforts we were mentioned in an article in the Barron’s April 23rd issue. We are in the top 1% of portfolios performance wise both years —managing an active portfolio that mirrored the LSGI Fund portfolio. The odds of this happening by chance are similar to the odds of being stuck by lightning.


What makes someone as successful as Warren Buffett? A new study examines some characteristics of very talented individuals in a number of fields. What common characteristics do they share?


In theory our research should identify firms that have a high probability of outperforming the market—and using our LSGI research to construct a portfolio of attractive firms we placed second in the Professor category in the recent Barron’s Challenge


Can individual investors beat the market? A recent Federal Reserve System  study using “extreme bounds” methodology normally reserved for examining complex economic systems examined 37 years of market data and found that a few factors were “robust” – statistically significant – indicators of above average stock market returns. Buying stocks with these characteristics should outperform the market – and are factors we utilize managing the LSGI portfolio.


Long term investing still can be rewarding. Living quiet, unpretentious lives Mr. and Mrs. Othmer - a professor of chemical engineering and a former teacher - died a few years ago in their nineties. When the Othmer's died, friends were shocked to learn that their estate was worth $800 million! The Othmer story is not unique. They had one secret: they were early investors with Warren Buffett.


Lectures, Presentations & Studies

08/01/2009  LSGI Fund 10 year report: study

07/15/2008  CAPM Report: Are We Generating Alpha?

07/07/2008  SMU Lecture Series: The Fourth Era of Oil

04/18/2008  Can Active Managers Generate Excess Returns?

03/25/2008  Monetary Policy & Small Cap Stocks

Finance Student Scholarships

12/01/2009    Work Study Grants

04/04/2009    2009 LSGI Scholarship

01/15/2008    2008 LSGI Scholarship

LSGI Research

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SMU Law School

MTU APMP Program