We’d like to think that great television content is going to be attractive regardless of how it’s distributed. This makes Discovery Inc. (DISCA) and the Walt Disney Co. (DIS) look attractive to us. The monopolistic tech companies are concentrated in expensive coastal cities and have slowed the homebuilding process around the country. U.S. history would say a migration to less expensive regions of the country by folks seeking affordable homes would be good for a homebuilder like NVR (NVR) or those renovating houses at Home Depot (HD). The emergence of the 86 million-plus millennial group could make financial service companies like American Express (AXP), JPMorgan (JPM) and Bank of America (BAC) look attractive.
If and when the leadership of the U.S. stock market moves away from the e-commerce favorites, you can then own very meritorious companies when they aren’t C.I.a.P. stocks, because they won’t be connected to the downside of the companies selling C.R.a.P.!
William Smead is CIO and CEO of Smead Capital Management.