Newsletters

Tax Reform and the Return of Irrational Exuberance

As we enter the final month of 2017, all eyes are focused on the Halls of Congress as the much anticipated Tax Bill approaches the finish line. Last week the Senate passed its version of the bill that will now be sent to the Congressional Conference Committee for reconciliation with the House version. A final version of the bill is expected to emerge from committee sometime before Christmas. Upon passage, it goes to the president’s desk for signing. We were…

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The Market Shrugs Off Lots of News and Little Action

  As we enter into the last month of Q3, all eyes should be focused on the return of Congress to Washington for a final attempt at passing a budget and enacting tax reform before the close of 2017. Instead, the focus has been shifted to any number of items that we would put far down the list of priorities for investors and the markets: Repeal and Replace, Building a Wall, Tampering by the Russians, Pardoning Sheriff Joe, Defending and…

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Can Congress Deliver on What the Market is Promising?

  In our April letter to clients we stated the obvious: Government is anything but nimble in formulating policy. We shared that in the context of tempering our expectations for what might be accomplished in Washington this year. So far, our very modest expectations have not been exceeded. The crafting of a new Healthcare Initiative and Tax Reform Bill are essential to the budget process. Despite the flurry of late night, optimistic tweets emanating from the White House, those charged…

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The Market Rides Higher into a Less Than Certain Future

  In our year-end letter, we discussed how investors’ expectations were driving market returns higher in the post-election period. The post-inaugural period has proved to be no different. DOW 20000 was recorded within days of the inauguration and, following a week of consolidation, coasted through DOW 21000 a short month later. Just like that, Easy Peasy. That advance seemed almost too easily accomplished for those of us who invest in rather than bet on the stock market. Why? Because, aside…

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The Election Sets a New Course for the Economy

  It’s taken the markets and most of the world several weeks to digest the result of the November general election. To be honest, we didn’t see this one coming. That could be due to our relying on mainstream financial media for most of our information, and of course believing the vast majority of polls, only two of which correctly predicted the outcome. No doubt, just as the Brexit vote shocked Europe, the Trump win shocked the world. So, where…

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Time for Investors to Adjust Expectations

  As if last year wasn’t bad enough. 2015’s poor stock performance not only reclaimed the gains of the prior year but also set the stage for this year’s grim start. Despite the US economy showing slow and steady improvement, stocks have taken a round-trip during the previous two years from and back to January 2014 levels and it’s been anything but smooth sailing in a sea of headline-driven volatility. Q1 ’16 started amid the ongoing clamor surrounding China’s slowdown…

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Divergent Returns Hint of Trouble for the Global Economy

  Since we last published at year-end, a number of global economic events have roiled the markets. Last year we saw the Fed tapering, the Russia-Ukraine conflict, the Ebola scare, and a downturn in oil and commodity prices. This year we saw that downturn become a bear market in Energy and Industrial Commodities. Add to that the Greece/Euro crisis, big questions surrounding China’s economy, and an imminent change in Fed policy weighing on stock prices. These events undoubtedly present opportunities…

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