Blog

18 Oct 2002

Posted at 12:49h in The Friday Brief by
Is the rally of the last few days for real – is the market bottom in place – do stocks rise from here – is the Bear dead?  Earnings drive stock prices in the long run and those reported so far this quarter suggest substantial improvement.  Nokia, for instance, said that they saw earnings stabilize in the second quarter and now believe by third quarter results that the turnaround is for real.  IBM reported an earnings increase of over 10% in a very difficult information technology-spending environment.  UnitedHealthcare said its earnings rose over 53% on cost-cutting and increased premiums.  Numerous others today and the preceding several days have beaten their earnings goals. 

11 Oct 2002

Posted at 12:51h in The Friday Brief by
If one watches CNBC or CNN for any length of time he would likely come away thinking that the stock market is on its final legs, and for good.  When things are bad, it seems that those who are best at pointing out how bad things are and could become, get the bear’s share of the spotlight.  Granted, there is plenty of bad news out there, but the good news is not getting through the dense bad fog.  A significant part of the good news is that many of the extremes being reached in today’s stock and bond markets are actually positive signals for better times ahead. 

04 Oct 2002

Posted at 13:09h in The Friday Brief by
Having just been in the mountains of West Virginia I was reminded of some very interesting parallels to today’s stock market.  From the mountaintop it seems one can see forever.  The view is spectacular, the air is fresh and clear, and problems seem miles away.  But down in the valleys everything is close and problems seem omnipresent.  Travel can be treacherous on the tight sharp switchbacks.  Just yards ahead around the next curve there may be a ten-ton coal truck barreling down the hill pushing the limits of control. 

27 Sep 2002

Posted at 13:38h in The Friday Brief by
The third quarter is drawing to a close and almost everyone in stocks lost money.  European stocks had some of their biggest losses of the past 15 years led by Europe’s largest economy, Germany.  The German DAX lost 32%, the largest since its introduction in 1987.  The U.K.’s FTSE 100 fell 17% for its largest loss since 1987.  France’s CAC 40 fell 24%.  Japan’s Nikkei 225 Stock Average declined 12% and reached a 19-year low during the third quarter.  Hong Kong, South Korea and Taiwan all lost as much as 10%.  Contrary to the trend, Pakistan rose 16% in response to U.S. economic sanctions being lifted.  In Latin America, Argentina gained 13%, but Brazil declined 38%, the world’s worst performance for the third quarter.  At home, the S&P 500 lost 14%, falling to a 4-year low and the NASDAQ fell 16.4% to a six-year low. 

20 Sep 2002

Posted at 13:42h in The Friday Brief by
Every year, for the past 20, a group of about 30 faithful Christ Church parishioners go into the hills of West Virginia on a trip to renovate, re-roof, re-floor, re-found, re-wire, and add bathrooms where there were none; but mostly they go to restore the hope that people care.  McDowell County in the southeastern hill country of West Virginia, north of Bluefield, was one of the state’s richest coalfields. 

13 Sep 2002

Posted at 14:03h in The Friday Brief by
You know from your July and August statements just how badly the markets mistreated long-term investors.  A few statistics from Credit Suisse First Boston help put the period into even better perspective.  A record $29 billion was removed from mutual funds in July 2002.  Stock funds experienced record outflows, while bond funds enjoyed record inflows.  Net outflows from equity funds in July 2002 were almost twice as large as those during September 2001, and more than five times larger than those during August 1998.  Every style of equity funds was affected by investors’ withdrawals in July. 

06 Sep 2002

Posted at 14:08h in The Friday Brief by
What have we lost since September 11th?  We are all infinitely more aware of just how quickly thousands of people can die at the hands of terrorist murderers.  On that horrible day, the lives of three thousand fathers, mothers, husbands, wives, and children were abruptly and tragically ended.  We all watched it in living horror.  During the past year, with that knowledge we readily sacrificed some of our cherished freedoms.  We continue to debate how many more liberties we will yield in the name of domestic security, but we have already given up much.

23 Aug 2002

Posted at 14:27h in The Friday Brief by
Have we seen the bottom or are we in for another cruel joke from old Mr. Market?  As you know, the market is random in the short term, and this bear has lived up to that reputation.  But, there are a lot of signs that point to an improved investment climate in the coming months. 

16 Aug 2002

Posted at 15:44h in The Friday Brief by
By the time you read this Brief, I will be in the ‘Mecca of Elvis,’ Memphis, Tennessee, along with 70 to 100,000 faithful pilgrims.  In the unlikely event you haven’t heard, the twenty-fifth anniversary of the King’s death is today.  It just happens to coincide with my taking my second daughter Emily, to school at Ole Miss.  The University of Mississippi lies in the quaint town of Oxford, Mississippi, one hour south of Memphis.  As it is difficult to fly to Oxford, Memphis is the gateway by air.  But even Memphis may become a tougher destination for Elvis pilgrims and Ole Miss students if the current descent of commercial aviation continues. 

09 Aug 2002

Posted at 15:58h in The Friday Brief by
July was the worst month for the S&P 500 since September 2001.  Few stocks were spared abuse.  Most of the best performers were stocks bouncing off oversold bottoms as telecommunications and technology stocks were among the leaders.  As mentioned in last weeks’ Brief, short covering accounted for most of the gains in stocks.  Lately, though, market specialists say they are seeing some real buying.  It may be due to money managers re-balancing their portfolios towards equities as bonds have become over-weighted during the past couple of years.