05 Apr 2002

Posted at 16:03h in The Friday Brief by
Companies will soon begin reporting their fourth quarter earnings to their shareholders and the market will have some real information to digest.  The market, between earnings announcements, is generally influenced more by macro economic, political, and emotional events than it is by the actual earnings performance of the sum of the companies it represents.  Since the SEC enacted Regulation FD (requiring all public companies to make significant and material announcements publicly and broadly) in August of 2001, a certain rhythm has developed.  The ‘dance’ as we shall call it between companies’ managers and analysts, media, and stakeholders actually has three movements. 

09 Nov 2001

Posted at 15:57h in The Friday Brief by
Over long periods of time the stock market outperforms bonds by a substantial margin.  But, it should come as no surprise that bonds were the winners over the past two years.  In fact, bonds have outperformed the S&P 500 by a 60% premium, the strongest difference in seventy years (1931 and 1932).  Tom Galvin of Credit Suisse First Boston notes that the year following the strong bond performance, stocks posted a 54% return in 1933 as the cycle reversed.  A similar story of good treasury returns during two consecutive bad years for equities came during 1973 and 1974.  That period was followed by greater than 60% returns in 1975-76.  The left-hand graph below reveals just how significant the signs are that we are at a critical turning point for stock and bond investors.  If the cycle repeats, the next twelve months could bring strong returns to stock investors. 

21 Sep 2001

Posted at 09:33h in The Friday Brief by
Have they won?  Not if you listened to our President last night and believed his resolve to win this war.  They have not won if you believe in the resolve of the American people.  They have not won if you believe the world leaders will be “with us” and not “with the terrorists.”  Indeed because of strong leadership by President Bush, his able cabinet, and a united Congress, as well as strong support from our allies, we hold the hope that the grip of terrorism on the civilized world will be broken and eventually eradicated.