1. It has a great balance sheet and massive alumni support.
2. It has a long history of success, including numerous Rose Bowl victories and two National Championships.
3. It has strong insider ownership and has had recent insider buying.
4. It has a strong Moat, because it is the only major college football team in the Puget Sound Metropolitan Area and the stadium is surrounded by water.
5. It generates such good free cash flow that it funds the non-revenue sports on both the Men’s and Women’s side.
6. It is economically essential. Football is the single best way to mass advertise your college around the country.
7. It is fan and donor friendly. There is something special about amateur athletics and going back to college six Saturday’s each year.
8. It has never been more out of favor than now with a record of 0-10. The only time it has been this far out of favor was at the end of the Jim Owens era in the late 1960′s and early 1970′s when Don James came in to coach.

We own a bunch of stocks that fit the same criteria and we think that the football team and our stocks are going to have a great deal of success in the future.

William Smead

William Smead
Chief Executive Officer
Chief Investment Officer 

Dear Clients and Prospective Clients:The stock market rallied in a powerful way yesterday and is begging everyone to take a position on up or down in the near term. I’d rather help us think straight. We own companies with very strong balance sheets, many of the most recession-resistant businesses, some of the most endearing brands and some of the most consistently profitable companies in the world. Creating and selling prescription pharmaceuticals, cable and network television (“couch potato” delight), cell phone service, women’s apparel, operating software, technology consulting, groceries, dry goods, life essentials, banking, investment management, custodianship of financial assets are all part of the mix. These are some of the most attractive companies the planet has ever seen and they were available at fire-sale prices on Friday. Even with Monday’s bounce, still are today!

We shouldn’t care where the prices go in the short run. We believe that they are highly likely to dramatically outperform other investment categories over the next 3 to 5 to 10 years and in the process meet our financial needs. If you have waited a long time to be side by side with the greatest investors of the last 20 to 40 years, start buying. You will stand out with the likes of Warren Buffett, Marty Whitman and Kenneth Heebner. Either through recent purchase actions or interviews in the media, (Google them and you’ll see) these guys are buying and holding while licking their chops toward the future when the crisis has subsided. I’ve had one client add to stocks in the last two weeks and it seems you’d have to kidnap and rob the folks sitting with cash on the sidelines to get them in. Who knows what the rest of this week will bring; just give me a long-term seat at Warren’s Buffet. 

Best Wishes,

William Smead