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The Third Pig

Quick Guide:

Client Letters (2007, 2006, 2005, 2004)

For more recent Client Letters contact us at

December 2007 Client Letter - February 17, 2008 (PDF)

Our Core Model Portfolio returned to the winnerís column this year besting each of the benchmark indices for 2007.


Topic highlights>> Our long term performance, Performance expectations, Our 2007 report card, Reasonable risk: rolling returns, Process gets results: successful funds, The process supports our principles, Where the bargains are


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December 2006 Client Letter - February 17, 2007 (PDF)

In 2006 the Core Portfolio finished up 12.9% versus 15.8% for the S&P 500. The Core returned 91.3% since inception versus 63.2% for the S&P 500.


Topic highlights>> The market, Coming trends, Why we remain optimistic: costs, Why costs matter, Our portfolio as an illustration


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June 2006 Client Letter - August 10, 2006 (PDF)

The Core Portfolio Average have returned -3.0% year-to-date and only slightly trail its benchmarks.


Topic highlights>> Prices fell and values rose, Our idea of risk, Our portfolios are now less risky


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April 2006 Client Letter - May 1, 2006 (PDF)

April saw the Core Portfolio Average trail its benchmarks but remain competitive on a year-to-date basis. The Core Portfolio Average returned 0.5% for the month to the Wilshire's 1.1% and the S&P's 1.3%.


Topic highlights>> The art and science of investing, A quality of temperament, We must avoid overconfidence, New positions: Encore Wire, Arkansas Best, FirstFed Financial


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March 2006 Client Letter - April 20, 2006 (PDF)

For the first quarter of 2006, our Core Portfolio Average trailed the Wilshire 5000. Our portfolios returned 4.1% to the Wilshireís 5.4%. and the S&Pís 4.2% for the quarter.


Topic highlights>> 2006 Q1 in review, Small-caps seem pricey, Valuation matters, Two to the bench, Three to the starting lineup, K-Swiss, CDW, American Eagle Outfitters, Become a client


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February 2006 Client Letter - March 7, 2006 (HTML, PDF)

Our Core Portfolio Average came in slightly behind the Wilshire 5000 and just ahead of the S&P 500 this month. Our portfolios returned -0.6% to the Wilshireís breakeven performance and the S&Pís 0.3%.


Topic highlights>> Our new portfolios, We are Heretics, We strive to optimize returns, Zealots and index funds, Heretics and value investing, Value investing is no secret, Investment Policy, Variation in returns vs. total returns, Variation means little, Traditional asset allocation fails, Value allocation succeeds, Strategic index funds, Our approach


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January 2006 Client Letter - February 7, 2006 (HTML, PDF)

Our Core Portfolio Average came in slightly behind the Wilshire 5000 and just ahead of the S&P 500 this month. Our portfolios returned 3.1% to the Wilshireís 3.6%. and the S&Pís 2.7%.


Topic highlights>> We sold our Freddie Mac and Bank of America positions, Uncertainty at Freddie, Misgivings about BofA's management, The influence of Mr. Buffett, Berkshire Hathaway, Berkshire's growth, Berkshire's value and potential return, Berkshire's risks


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December 2005 Client Letter / Year End Review - January 10, 2006 (HTML, PDF)

Over the last three years and since inception we have increased our capital and the Core Portfolio Average has beaten the Wilshire 5000 and the average domestic equity mutual fund over that time with 3-year annualized returns of 20.1%.


Topic highlights>> Our long term performance, Our long-term expectations, Our report card, Smooth returns ain't possible, How the financial community defines risk, The Sharpe Ratio, A better definition of risk, 2005 in review, The importance of persistence, The process produces results, Our process is connected to our principles, Good companies, Bargain prices, The marriage, Our preference for concentration, Overdiversification in mutual funds, Mutual funds fail, 25 stocks, Diversification decreases returns, Action in the absence of opportunity, Application of philosophy, The decision process regarding new money, Cash versus stocks, The proper margin-of-safety, What other investors think, Mistakes and missteps in 2005, Accomplishments in 2005, Plans for 2006, Subscribe


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November 2005 Client Letter - December 6, 2005 (HTML, PDF)

Our Portfolio Average declined 4.4% in November due to a to strong performance in the Choice model portfolio. The Relative Value model portfolio returned 2.5% while the Choice model portfolio returned 8.9%....


Topic highlights>> It was a good month, The Little Book That Beats the Market, Good companies at bargain prices, Caution is required, Highlights of The Little Book, We have our own "magic formula", You can benefit from our formula, Buy the book


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October 2005 Client Letter - November 8, 2005 (PDF)

Our Portfolio Average declined 4.3% in October due to a precipitous fall in housing stocks. The Relative Value model portfolio returned -5.4% and the Choice model portfolio returned -1.6%....


Topic highlights>> The housing boom, The housing bust, Approach with the Relative Value model portfolio, Characteristics of our housing/real estate investments, Low price multiples in the housing/real estate sector, The long-term trend in housing/real estate, Maintaining a long-term mindset


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September 2005 Client Letter - October 4, 2005 (PDF)

Our model portfolios both took a downward slide in September returning an aggregate -1.83%. The Relative Value model portfolio returned -2.5% and the Choice model portfolio returned -1.1%...


Topic highlights>> We've changed our benchmarks, We think benchmarking is important, Making apples to apples comparisons, Characteristics of our ports, Components of a good benchmark, The S&P 500 and Lipper Large-cap, The Wilshire 4500 & Lipper Multi-cap, Our ports make ONE all-cap portfolio, The advantage of segmenting our investments, The Wilshire 5000 and Lipper All Mutual Funds Average, "Style-drift" in our ports, Benchmarking article, In closing


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August 2005 Client Letter - September 15, 2005 (PDF)

Our model portfolios both took a downward slide in August. The Relative Value model portfolio returned -4.8% and the Choice model portfolio returned -2.5%...


Topic highlights>> Paring down our positions, Our sell criteria, Time Warner, Moody's, JetBlue, We're cash flush


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July 2005 Client Letter - August 1, 2005 (HTML PDF)

Our model portfolios both performed strongly in July. The Relative Value model portfolio advanced 6.1% while the Choice model portfolio gained 8.3%, besting their respective indices this month...


Topic highlights>> Be a MILLIONAIRE in a decade, Our portfolios are well positioned, Recent market returns have been inflated, "Staying put" is a key to our success, Fred Flintstone or the Great Gazoo, The downs and ups of 2005, Our returns vs. stock market history, "Acceptable" returns and what they look like, We are playing with a loaded deck, Benchmarking our results, The Third Pig, Your seal of approval


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June 2005 Client Letter / Mid-Year Review - July 5, 2005 (HTML PDF)

After last monthís strong performance, our model portfolios had mixed results in June. The Relative Value model portfolio advanced 5.5% while the Choice model portfolio declined 2.4%...


Topic highlights>> Mixed messages in the economy, What the short-term tells us, Recent news about our stocks, Our advantage, We've outperformed the competition, An unfortunate consequence of our style, "Great" investors and their down years, Buffett's rules of money management, A problem with performance measurement, Why we measure returns, How you shoud judge us, Two examples, Communication with our clients is important, Our blog


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May 2005 Client Letter - June 22, 2005 (HTML PDF)

Both the Relative Value and the Choice model portfolios outgained their benchmarks returning 6.8% and 7.1% respectively...


Topic highlights>> Why we write to you, Our partnership with you, Our mission, Refer us, Market timing


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April 2005 Client Letter - May 13, 2005 (HTML PDF)

Weíve made several changes to both the Relative Value and the Choice Portfolios. We rebalanced the Relative Value portfolio and eliminated some positions from the Choice, while adding others...


Topic highlights>> Other funds like us, How we measure (short-term) performance, Anheuser-Busch, eBay, Capital One, Buffett and Munger quotes


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January 2005 Client Letter - February 14, 2005 get (HTML PDF)

The Relative Value portfolio held up amid downward pressure from the market in January.  However, January proved a tough month for our Choice portfolio. The Choice portfolio had a suboptimal return of -8.37%, substantially lagging the marketís return...


Topic highlights>> eBay's performance, eBay's competitive advantage, eBay's valuation


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Year End/December 2004 Client Letter - January 31, 2005 (HTML PDF)

Brick Financial Managementís model portfolios - the Relative Value and the Choice - had an excellent year rising 33.54% and 15.31% respectively. The Relative Value portfolio beat its closest benchmark, the Russell Midcap Index which returned 20.22% in 2004. The Choice portfolio had similar success, besting its closest benchmark, the S&P 500 Index which returned 10.88%...


Topic highlights>> Effect of compound interest, Positions of note, Our gains and losses compared to the market, Our portfolios statistics, 2005 Outlook, Mistakes, Plans for 2005


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