Marketing Commentary- Q4 2006
What’s Been Happening? Regular readers of this portion of the quarterly review have repeatedly been exposed to the fairly reliable stock market mantra: “prices follow profits”. Reported profits of the S&P 500 companies exceeded expectations in the third quarter and grew by 21.2% over the third quarter of 2005, according to the Wall Street Journal. That boosted the S&P 500’s record number of consecutive quarters of double digit year-over-year earnings gains to 18, roughly corresponding to the finish of the Bear Market (2000-2002) that it seemed would never end. The upward trend has...
Read MoreMarketing Commentary- Q3 2006
What’s Been Happening? The Dow Jones Industrial Index touched it’s all time high in the early days of the fourth quarter. Although a poor benchmark for the overall U.S. stock market, let alone for a global investor, it nevertheless serves as the psychological proxy for the mood of the American investing public. Passing its previous all-time high, which was reached over six years ago, might indicate some sort of watershed. We think not. It is simply another cork of data floating on a sea of noise. Trends to be Aware of Large companies seem to have regained leadership as the S&P 500 is...
Read MoreMarketing Commentary- Q2 2006
What’s Been Happening? After a long run up, International and Emerging Markets took short, swift dives in May and June. The 25% decline from peak to trough in Emerging Markets qualifies as a true bear market by most definitions. Comparatively, US markets fell only modestly, not even qualifying for an official “correction” (10%). By the end of June, the asset classes that had fallen the most began to recover. All this occurred with heavy trading volume which we suspect means those who rushed in at the wrong time lost a fair amount of money. Bonds muddled along, mostly losing small amounts due...
Read MoreMarketing Commentary- Q1 2006
What’s Been Happening? The hangover is finally past. Beware immodest proposals. The vicious US Bear Market finally ran out of steam just over three years ago. In an almost non-stop rebound, virtually all stock market investors look smarter than they are right now. The nearly 800 trading days without a downward correction of 10% or more is not unprecedented, but it is unusual. This won’t go on forever. This is the time when anyone who has been invested in stocks has a pretty good three-year track record and Wall Street marketers are not known for their humility. Behavioral economics warns us...
Read MoreMarketing Commentary- Q4 2005
What’s Been Happening? While it may seem like the year sputtered to a flat finish, a look around the globe tells a different story. Emerging Markets scored enormous gains as the “ten flatteners” (such as offshoring and outsourcing) that Thomas Freidman talks about in “The World is Flat” took hold. Bangalore was booming. We frequently hear sound bites about the increasingly less relevant Dow Jones Industrial Index (flat for 2005), the Nasdaq (up 1.37% in 2005) and the S&P 500 (+4.89% in 2005). Our global portfolios substantially outperformed. A year ago, when our press was decrying the...
Read MoreMarketing Commentary- Q3 2005
What’s Been Happening? It seems like risk is back in fashion, especially outside the U.S. International and Emerging Benchmarks made the loudest statements in the past three months, up 10% and 18%, respectively. Emerging markets have advanced almost 50% in the past year, despite higher oil prices that should hurt economies that rely heavily on energy demanding manufacturing. Despite above average three-year annual returns of over 16 % for large US Companies, the S&P 500 is still underwater over the past five years. The record damages of Hurricane Katrina and her sibling storms are now...
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