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When the coronavirus (Covid-19) first hit the news, the markets shrugged off the outbreak, assuming that China’s aggressive efforts to quarantine Wuhan would limit the spread.  This assumption fell apart rapidly over the past weekend as cases appeared in South Korea, Italy and Iran.  In keeping with other periods of stress, stocks have fallen sharply (7-8% in the last few sessions as of this writing) and quality bonds have rallied as investors seek safe alternatives for their assets.    None of us are contagious disease experts, but our reading suggests that this virus has spread to all 5 continents and that reports of new cases are likely to continue…

Rising Valuation Multiples The US stock market had an especially strong year, with the broad indices up roughly 30% on a total return basis. As discussed in previous commentaries, the rise in the market was more due to multiple expansion and less due to earnings growth. In fact, the S&P 500 started the year with a trailing twelvemonth price/earnings multiple of 16.5x and it rose to 21.6x by year-end. This 30% multiple expansion mirrors the 30% market appreciation almost exactly. In other words, there was a dramatic increase in what…

Volatility returned to the stock markets in August after the broader indices all posted double digit returns through the first seven months of the year. While the overall market environment appears benign, there were troubling developments in the short-term lending repurchase (repo) market. This event received a lot of attention because it came as a surprise to the Federal Reserve (Fed) itself, and it stirred memories of the kind of emergency measures the Fed took preceding the Great Recession. The Fed has intervened appropriately, but the turmoil highlights a fragility…

The Standard & Poor’s 500 has returned +18% year to date through the second quarter of 2019. This was the best first half showing for the S&P in 22 years. This performance stands in contrast to the darker mood that prevailed seven months ago when the market completed a painful 20% sell-off. We’d like to report that these returns year-to-date are the result of improvements in earnings growth expectations and the macro-economic outlook. While that would be a true feel good story, it would not be accurate. Returns this year…

Over the past few months, Alie Hamilton of Eagle Ridge Investment Management organized a team to participate in Swim Across America's Fairfield County Open Water Swim.  She and nine other swimmers completed swims of 0.5 miles to 3.0 miles on June 22nd off Cummings Point in Stamford.  Aside from Alie, David Laidlaw, Eagle Ridge's Managing Member, also swam in the event along with other local professionals and dedicated swimmers.  The weather was perfect with clear blue skies and everyone was invigorated by the brisk water and challenging swim.  The team…