Posted by David Tillson 2011 Second Quarter For most of the past several years, investor attention has been focused not so much on individual companies, but on macroeconomic matters, and rightly so, as the recession that ended two years ago was the longest and deepest since the 1930s. As investors, we spend most of our time researching and analyzing companies. Our essential view is that well capitalized, well managed companies, purchased attractively, will reward investors through a combination of capital appreciation and income received. In light of recent downward revisions…

Posted by David Tillson 2011 First Quarter The one thing that can be said for the world today is that it’s not boring! Every week seems to bring another round of nerve jarring news. If mankind itself is not creating the news, then mother nature is. 2010’s stories of the BP well disaster, WikiLeaks’ War Logs disclosures, Haiti’s earthquake, the Chilean mine rescue, and the air travel mess from Iceland’s volcano are all but forgotten. We now are dealing with the Japan earthquake/tsunami/nuclear disaster, political unrest in Egypt, Bahrain, Libya…

Posted by David Tillson 2010 Fourth Quarter In Our 2009 year end letter, we wrote that we believed that the economy would continue to recover, inflation would remain low, S&P earnings would be surprisingly strong, and that the valuation of the market would remain in the 16-18x range. We were correct on the first three items, but too optimistic on the fourth as the multitude of continuing worries kept the market’s valuation in the 13-15x range for the latter part of 2010. Nevertheless, the market did generate a 15% return…

Posted by David Tillson 2010 Third Quarter The market’s roller coaster ride continued into the third quarter with two positive months and one negative month. The quarter’s strong 11.3% rise erased most of the second quarter’s decline and did leave us with a positive return for the year. This has been a year without direction and the market has been driven not only by economic news but by factors such as the “risk-on/risk off” trade, high frequency trading, and the flow of funds into and out of various asset classes.…

Posted by David Tillson 2010 Second Quarter As we enter the second half of 2010, investors are still faced with an unusual amount of uncertainty, a reduced appetite for risk, and a barrage of mostly bad news from the media. The sharp recovery in equity prices leading up to the second quarter was brought to a halt in May and June as the market declined 15% from its April peak. Stocks were weighed down by the Euro-area sovereign crisis, a loss of confidence in the global economic recovery, and the Gulf…