Investment Outlook - 2nd Quarter 2010 
July, 2010
The stock market recovery that began in March ’09, came to an abrupt halt in the second quarter.  Stock indexes are down about 15% from their highs of early April and off about 7% year to date.  Keeping with our long term history of not participating in all of the market’s downside, our equity portfolio is down about 3% for the year.   

Investment Outlook - 1st Quarter 2010 
April, 2010
Our stock portfolios were up over 7% in the 1^st quarter, compared to 5.4% for the S&P 500 and 4.9% for the Russell 3000 Growth Index.  Performance was led by oil service, health care, retail, and financial positions.

Investment Outlook - 4th Quarter 2009 
January, 2010
As it became increasingly clear that the “great recession” had ended and a recovery was under way, the stock market rally gained strength.  For the year, the S&P 500 was up 26.5% and the Russell 3000 Growth Index was up 37%.  Our stock portfolios were up over 40% in 2009.  While U.S. corporate earnings for the entire year were down sharply, the companies in our portfolios actually generated an earnings increase.  That strong earnings performance is the primary reason our stocks performed so well last year.  Technology, health care and oil service companies were the biggest gainers.

Investment Outlook - 3rd Quarter 2009 
October, 2009
The robust recovery in the stock market over the past six months reflects confidence that the global recession has hit bottom and a recovery is now under way.  We share that opinion.

Investment Outlook - 2nd Quarter 2009 
July, 2009
Over the past three months the equity market turned strongly positive and our stocks were up almost 17% in the quarter.  The stock market has a long history of turning up a few months before an economic recovery begins.  While many of the troubling financial and economic issues of 2008 are still with us, the general level of fear and uncertainty has begun to subside.  The United States economy is showing signs of bottoming.  Most importantly, housing prices and employment may be close to stabilizing.  Jobs creation always lags in an economic expansion and we don’t expect a meaningful improvement in the employment picture for another several months. 

Investment Outlook - 1st Quarter 2009 
April, 2009
The high level of volatility in the stock market continued.  The S&P 500 started the year with a frightening 25% decline and then rallied in March and ended the quarter down 11%.  In that volatile environment, most stock portfolios were down a little over 5%.  If you owned bonds in your portfolio, they had a modest positive return in the quarter.

Inter-Quarter Update - Client Letter 
March 13, 2009
Peter Bernstein, a highly respected investment professional and editor of The Journal of Portfolio Management, believes “the current economic and financial environment has no precedent in history”.  We agree with him. 

Inter-Quarter Update - Client Letter 
March 6, 2009
Unrelenting selling that continues pushing stock prices lower is generating client phone calls asking when will it end?  The short and direct answer is we don’t know.

Inter-Quarter Update - Client Letter 
February 19, 2009
At this writing the major stock indices are retesting the November lows for a third time.  The extreme volatility persists as the market waits to see the Treasury’s plan to stabilize the banking system.  This is not a small task.  President Obama and his economic team continue to spend the majority of their time focusing on this problem.  Despite the market’s demand for quick action, it is best to take the necessary time to develop a solid plan.  We expect to see the plan over the next few weeks.  In the meantime, the signing of the newest economic stimulus bill should provide more assistance to stabilize the economy and eventually return the economy to a growth mode. 

Investment Outlook - 4th Quarter 2008 
January, 2009
The best that can be said about 2008 is it is over.  All major stock indexes declined and capped a year in which over $30 trillion was wiped out in the world equity markets.  In the fourth quarter, bank stocks tanked and indiscriminate selling by hedge funds along with news that our economy was officially in a recession pressured the market.  In addition, unemployment trends worsened and automobile manufactures required government assistance.  When all was said and done, the stock market ended the year down almost 40% for only the second time in the last 80 years. 

Equity Markets - Client Letter 
November 21, 2008
This week witnessed another brutal stock market decline and we are getting the “What’s next” question.  The combination of panic and forced selling by mutual funds and hedge funds to meet shareholder redemptions is the primary force driving stocks lower.  Market history would suggest we are close to a bottom simply because stocks are so incredibly undervalued now by any measure.  We are very close to the valuation level last seen in 1974. 

Equity Markets - Client Letter 
November, 2008
At this writing stock prices are once again declining and the low point reached October 10^th is being tested for the second time.  The extreme volatility over the past couple of months is unnerving and clients are asking “What should we do?”

Investment Outlook - 3rd Quarter 2008 
October, 2008
“Houston, we have a problem”.  Remember that famous transmission from Apollo 13?  Actually they had a series of major mechanical malfunctions.  No one panicked and through a series of creative repairs by both the ground and flight crews they survived.  The Apollo program continued and ultimately was a great success.  There is a parallel with the U. S. economy.  We have had a major disruption in the normal flow of credit in the banking system.  The Treasury, Federal Reserve and Congress are engaged in a series of extraordinary repairs to restore the health of the banking system.  We expect them to work and the U. S. economy will not only survive, but transcend our current problems. 

 Equity Markets - Client Letter 
September, 2008
The resolution of the problems in the credit sector took a dramatic turn over the weekend.  The Federal Government, after bailing out Fannie Mae, Freddie Mac and Bear Stearns said “No” to Lehman Brothers request for a financial rescue, sending it into Chapter 11 bankruptcy.  This means companies that make bad decisions now will be allowed to fail.  That is the way the free market capitalistic system has to work to function properly.  At the same time the Federal Reserve and the world’s other major central banks announced a readiness to provide the liquidity necessary to keep the financial system running smoothly. 

Equity Markets - Client Letter 
August, 2008
First the good news, the companies in your portfolio reported second quarter earnings grew an average of 22%. Companies in the technology, energy, and health care sectors had the best earnings gains.  Approximately one-half of the earnings came from their foreign operations. 

Investment Outlook - 2nd Quarter 2008 
July, 2008
After an encouraging start back in April, the stock market sold off sharply in June but for those owning stocks, that portion of the portfolio still managed a modest positive return over the last three months. 

Inter-Quarter Update Letter - March 2008 
March, 2008
After last week’s sell off, the U.S. stock market is down about 10% this year.  The primary factor scaring investors is continuing uncertainty over the length and depth of what is commonly referred to as the credit crises.  Last week, two new reports were released.  One projected total worldwide losses of $400 billion and the other $600 billion, about half of which will be in U.S. financial institutions.  So far U.S. firms have written off about $125 billion and raised $90 billion of new capital, primarily from foreign sovereign funds. 

Investment Outlook - Fourth Quarter 2007 
January, 2008
For the first time since 1999 the growth sector led the market.  The disparity in growth rates between growth and value stocks became the catalyst to draw investors back to the growth sector.  It can continue because the growth sector is still significantly under valued.  Your stock portfolio actually is a better value today than it was a year ago.  Why?  Because the companies grew their earnings in 2007 at an average rate in excess of 20%, which is more than the stocks appreciated. 

Investment Outlook - Third Quarter 2007 
October, 2007
Over the past three months, the global financial markets dealt with the sub-prime mortgage melt down.  The Federal Reserve responded appropriately by pumping money into the banking system and lowering the Fed Funds rate by one-half of one percent, from 5.25% to 4.75%.  The cut marked a significant reversal in Federal Reserve policy and we expect additional cuts in the future.

Investment Outlook - First Quarter 2007 
April, 2007
Equity markets started 2007 strongly as corporations reported 10% fourth quarter earnings growth.  These results, while registering a slowdown, exceeded expectations and pushed stocks higher.  February and early March brought a meaningful worldwide correction as the Chinese stock market declined, Alan Greenspan predicted the “possibility” of a U.S. recession and default rates and bankruptcies escalated in the sub-prime mortgage market.

Investment Outlook- Client Letter 
July, 2006 

Since the end of the second quarter, the stock market has continued the decline that began in early May. Higher interest rates and energy costs and now escalating violence in the Middle East have combined to increase investor uncertainty. Stock market volatility has escalated and we are seeing exaggerated declines in many individual companies in addition to the broad decline in the overall market.

Investment Outlook- Second Quarter 2006 
July, 2006 
When the last bull market peaked six years ago, U.S. annual corporate profits were $550 billion. As of 3/31/06, corporate profits hit a record $1.2 trillion and a record 8% of gross domestic product (GDP). During that six year period there has been an enormous adjustment in how those profits are valued. The price earnings ratio for the S&P 500 then was 30 times, now it is 14 times this year?s expected earnings.

Investment Outlook- Stock Market Changes 
May, 2006
Based on the reaction of the stock market over the past couple of weeks, one would think first quarter corporate earnings reports had a decidedly negative tone to them.  The truth is actually quite the opposite.

Investment Outlook- First Quarter 2006 
April, 2006
Equities generated a high single digit return during the first quarter, which significantly exceeded the market indices.  The advance was fueled by strong fourth quarter coporate earnings, which once again exceeded expectations.

Investment Outlook- Fourth Quarter 2005
December, 2005
We enter 2006 with corporate profits at a record high 8% of Gross Domestic Product. Household net worth and U.S. employment are also at an all time high. A few weeks ago, Barron?s reported corporate America was sitting on $2 trillion (not a misprint ? that?s trillion, not billion) in cash. With all that cash, dividend increases, share buy backs and acquisitions are also setting records.

The re-emergence of growth investing
December, 2005
While growth and value investing have each outperformed at different times for a variety of reasons, long-term investors concentrating on growth companies have generally had superior returns.