Current Commentary

Despite a worrisome development in France, one with negative implications for the survival of the Euro, U.S. stocks not only managed to rally Tuesday, April 24th and a couple of our core client holdings achieved new all time price highs.  How to explain this?  An analytical service to which we subscribe, “Chart of the Day” (www.chartoftheday.com) suggests that with the “corporate earnings yield” above 4%, and over 70% of S&P 500 companies reporting positive earnings surprises, we can expect further appreciation for the market over the remainder of the year.  This, of course, does not preclude the possibility of a strong correction along the way.

Right after Thanksgiving last year, I sat at lunch with a client. We were in the midst of another hefty fall in stock prices after a market advance off last summer's crash failed at the 200 day moving average. The financial press was mostly gloom and doom. High unemployment, another bad housing report, pre Christmas retail sales in doubt etc. [...]

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 [...]