Current Commentary

I've posted our year end Financial Review and Outlook contained in our Newsletter for January, 2012. The bumps experienced by many investors in 2011 were cushioned by our Balanced/Value style and most clients had what they have told me was a positive, satisfying experience. This, despite the highest volatility for equities since the dark days of 2008 and headlines suggesting impending [...]

Bill Gross, PIMCO’s “Bond King” and manager of a mutual fund widely held in our client portfolios was interviewed just before Thanksgiving 2011 on Bloomberg TV. Among his comments he revealed how he personally is positioned with his investments. This part on how Gross is invested was interesting:

Bloomberg today features an article by an Indian author who begins by wondering why protests against "The System" in developed nations has not found traction in places like China, India and other rapidly growing, aspirational nations. He cannot seem to deal with the fact that few people in these booming economies appear unhappy with capitalism. It finally has motivated me to comment on the "Occupy Wall Street" phenomenon, which I find rather annoying. The article in question demonstrates a strong desire to twist facts. The author suggests the lack of an "Occupy Wall Street" faction in financially expanding nations, ignores the plight of suffering masses. This suits his message supporting oppressed workers. The two groups are, in my view, entirely different. Sure, working conditions in the "Third World" are far from ideal as they once were in the United States,during it's heyday as a blue collar nation, growing rapidly, a century or more ago. Undoubtedly protests by workers have been brutally suppressed, particularly in China. Likely, these difficult conditions will be addressed by those societies with time. By contrast, in my perception, the "Occupy" people appear to be driven by an entitlement mentality unknown to a miner in India or a trucker in Brazil. Folks in the Third World are grateful for jobs, and too busy working to show up at protests.

With a banking crisis roiling Europe, whose financial control mechanisms are apparently suffering from a higher degree of political influence than we have here (!), world markets are again on the defensive, led by European banks and nearly every other financial institution around the world.  Those who are working hard to destroy the independence of our own central bank would [...]

J. Pierpont Morgan had a stature in the financial world somewhat akin to that held by Warren Buffet today, only grander.  When the U.S. Treasury was so distrusted that it could not float bonds, Morgan led a syndicate in 1893 to finance the Treasury’s needs.  When a panic gripped the New York Stock exchange in 1907, what we would call today a “systemic breakdown”, Morgan organized powerful banks to purchase shares of key, financially healthy stocks.  This renewed investor confidence and the crisis ended.  Out of these events, Congress created the Federal Reserve banking system, so that the nation would never again rely on the good will of a single man or small group of financiers to avoid financial disaster.

Quarter End Commentary July 25, 2011Through June 30, 2011, our five year composite track record, net of all fees, through June 30, 2011 shows that we produced an average annual return of 6.07% for our discretionary clients during a tumultuous time in the financial markets.  By contrast, the Standard & Poors 500 stock index averaged only 2.94% per year.  This [...]