Blog

24 Aug 2001

Posted at 11:24h in The Friday Brief by
For years investors took comfort in the statement above.  Contemporary investors, including this one, took comfort on Tuesday when the automotive giant affirmed its third-quarter profit outlook and production for the year, four days after rival Ford Motor Co. lowered its earnings forecast.  That prediction shocked investors who had been reassured by stronger-than-expected first-half U.S. auto sales as the economy slowed.  GM’s confidence on Tuesday gave investors a glimmer of hope that the economy‘s trend might be improving. 

17 Aug 2001

Posted at 12:35h in The Friday Brief by
Bear markets turn investor strengths into liabilities and this insidious beast is no exception.  The aftershocks of the ‘Internet Bubble’ make this crash all the more difficult.  What we held as strengths before the collapse in confidence have become liabilities.  During Bull markets, long-term investors are rewarded for holding good companies in spite of brief stock pullbacks that occur when short-term investors are frightened off by negative news.  Investors with longer views snap up the bargains left behind, believing that the news has limited or no long-term relevance.  Alternatively, bear markets lack clarity or visibility of the future, making it difficult or impossible to know whether the effect of negative news is short lived or has longer implications. 

10 Aug 2001

Posted at 13:52h in The Friday Brief by
As I write this letter, the market is falling rather dramatically.  It was triggered by the PPI release this morning which was down considerably below expectations, primarily on falling energy prices.  Since then, the newswires show that 50 U.S. and British aircraft have attacked three Iraqi military targets.  Given the recent terrorist and military hostilities in Israel, the market undoubtedly fears worse trouble in the Middle East. 

03 Aug 2001

Posted at 13:59h in The Friday Brief by
Evidence is mounting that we may be very close to the low point in the economy.  The cyclical recovery is likely to be more muted than earlier expected, but it looks doubtful that we will see a full-scale retreat.   Six reductions in the overnight bank-lending rate by the Federal Reserve and government mailings of advance tax refund checks should provide consumers with reason to keep spending. 

20 Jul 2001

Posted at 14:09h in The Friday Brief by
Increasingly, economists are saying the worst may be behind us, but recovery is not clearly in sight.  Mr. Greenspan’s comments to Congress yesterday pointed to the possibility of a turn in the economy in the second half of this year, but he warned that the current malaise could likely continue for some time to come.  Recent company earnings reports have not been as bad as feared while revenues did disappoint more often.  Managers in general have done an excellent job cutting expenses in the face of this dramatic slowdown, but their reluctance or inability to provide any meaningful guidance about the near-term future weighed on stock prices. 

13 Jul 2001

Posted at 14:16h in The Friday Brief by
Economic News: Mostly good news this week pointing to continued recovery in the economy Wholesale inventories in the U.S. increased 0.2% in May to $302.62 billion on the largest monthly increase since November, the Commerce Department said Tuesday.  A consensus of analysts had projected a 0.1% increase.  Manufacturers are pushing the inventories from their shelves to those of wholesalers through “good deals”.   Meanwhile, wholesale sales slipped 0.1% from April to $229.82 billion. Analysts had expected a 0.3% increase for the month.

03 Jul 2001

Posted at 14:44h in The Friday Brief by
All data last week provided upside surprises, a rare event over these past few months when the overwhelming dynamic was the economy's adjustment to the overhang of excess inventory. The data not only suggest an turning point but also support the notion that the weakest quarter in the cycle was Q2.

29 Jun 2001

Posted at 14:55h in The Friday Brief by

Introduction

We are pleased to introduce our weekly email, the Friday Brief.  It pulls together many of the numerous strands we're following to try to make some sense of this unique time in history.  The old economy, the new economy, the markets, the Federal Reserve, the politics, all interact to shape this economy of ours.  Understanding their implications forms the art and science of investing.  In the Friday Brief we will share some of the news and events that shape our investment decisions as well as the rationale for recent buy and sell decisions.  This letter is unusually long because we catch you up on the entire quarter.  We will try to organize the Brief in such a fashion to facilitate a quick and efficient read.  For those who prefer more detail, we provide articles and links to articles we find particularly useful.  PLEASE read the American Spectator article at the end of this brief as it makes an excellent case for just what we need from our congress right now.  Write your senators and reps if you agree.