Horizon Kinetics May 2013 Market Commentary

Regular readers are familiar by now with Horizon Kinetics’ focus on qualitative attributes that may be predictive of outperformance. Consistent with the Firm’s long-term value investing philosophy, identification of these traits has been central to our research and investing process since the inception of the Firm. Fundamental research is generally required to identify these characteristics. This is a time-intensive process, which contrasts with the quantitative screens that can be used to identify groups of stocks with similar price to earnings ratios or sector classifications. However, the long-term performance of companies described by these predictive attributes suggests that the effort is worthwhile. Recent commentaries have highlighted owner-operators, dormant assets, spin-offs, bits & pieces, and scalability. This month’s discussion will center around long product lifecycles.