2013 Fourth Quarter

Posted by David Tillson 2013 Fourth Quarter   Our last year-end letter spoke of thinking ahead to 2024 and imagining how the prior decade turned out. Our crystal ball predicted among other things at least an 8% annual return from stocks. At the time, we didn’t realize that we would have three years’ worth of returns crowded into 2013. April’s letter talked about the stock market’s setting new highs and asked: “So, now what?” July continued our theme of: accept the “good-news, bad-news” vacillation in the market and instead, concentrate on the…

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2013 Third Quarter

Posted by David Tillson 2013 Third Quarter  “10,000 in 2010” was a catchy phrase referring to the Dow Jones index (DJIA) that we had used to help focus clients on long term investing. We first started using it during the tech bubble when many people became believers in “trees do grow to the sky.” It was created simply by extrapolating the long term growth in earnings out 10 years and multiplying by a P/E ratio of roughly 10x. Simple, yet effective and surprisingly quite accurate. Our new mantra is “25,000 in 2020.” Not quite…

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2013 Second Quarter

Posted by David Tillson 2013 Second Quarter   For those of you who have heard the following: “Mom and Dad, I have some good news and some bad news,” you probably remember that mixed feeling of unease combined with potential relief. When your child gives you the good news first: “now you can finally get that new car,” that mixed feeling quickly solidifies into a much stronger emotion. This “good news, bad news” is essentially what investors have been hearing from Mr. Market for much of the past five years. While it may have put investors…

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2013 First Quarter

Posted by David Tillson 2013 First Quarter   Readers of our past commentaries know that we believe there are two sides to investing: the science of the business as well as the art. Analyzing a business, understanding its numbers, its competitive positioning, and its potential earnings power or true worth – that’s the science. The art is trickier and relates more to timing, understanding human behavior and how it drives decision-making. We believe the latter is more likely to often create opportunities, or risks, in terms of assets becoming mispriced. With stocks recently setting…

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2012 Fourth Quarter

Posted by David Tillson 2012 Fourth Quarter Despite the fiscal cliff drama in December, 2012 was a good year for investors. Stock markets around the world rose strongly and interest rates fell even further from their very low 2011 levels. Economies were still perceived to be fragile and central banks did what was necessary to shore up investor confidence and foster economic activity. The Fed’s Quantitative Easing efforts appear to be having the desired effect of pushing investors into stocks and other risk assets. The Fed believes that as this…

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