Author Archives: Redmond

Top of the Fourth All economic and financial market cycles have varying degrees of length and durability that are difficult to predict. So, considering average length of previous cycles provides little insight into the current one, since each cycle is … Continue reading →

During the early 1950’s, one of the most popular cartoonists was Walt Kelly whose major character was Pogo. His characters were a reflection of human nature. He also ventured into politics and his most famous quotation, “We have met the enemy and he is us,” was a parody of Commander Perry’s message in 1813 after the Battle of Lake Erie. This phrase was Kelly’s response during that time period to the McCarthy Hearings but may also be appropriate in trying to answer the question as to why studies of mutual funds and investment management firms have demonstrated that over time periods of 10 years or more, most managers underperform the stock market indexes. Given that our profession has very talented, highly educated and motivated professionals, why is this a fact? It is “us”. Our thoughts on this subject are not to present any air of superiority or arrogance, but are based on years of experience and in analyzing our own mistakes. Accordingly, we have incorporated many reasons for underperformance into our investment philosophy, decision making and disciplines in order to improve our odds for success. Continue reading →

Every kid loves a birthday party, especially their own, and all kids get fired up about birthday cake!!!! Without birthday cake there might be no party at all, which is why it is served at the end. The following birthday … Continue reading →

  One of the things that many legendary music groups are able to do is to play a song that ends with free form riffing and morph the riff into the beginning of another song. The transition happens gradually such … Continue reading →

They say that if you listen closely, preachers give different versions of a few sermons for most of their lives. If that is the case, then our letters would make such sermons look like a variety of variety shows and … Continue reading →

We continue our positive outlook on stocks, although some corrections from the strong September increases should be expected. There are still many investors who remain too cautious on the stock market. This is evidenced by the large purchases of bonds … Continue reading →

Exerpt from 2010 Second Quarter Letter to Clients Appended to this letter is a summary on the lion’s share of topics that seem to be keeping people up at night. Please call to discuss these any of these issues or … Continue reading →

Exerpt From 2010 First Quarter Letter To Clients Coming out of a severe economic recession we think it is “normal” to have a swelling of popularity around an outlook akin to today’s “new normal” (sluggish economic growth with persistently high … Continue reading →

So where are we now? We are in one of the most exploitable stages of the emotional cycle of investing. We think some people are still despondent, most people are depressed, and some people are starting to feel hopeful. We characterize despondency as a state of mind in which one has an aversion to mental activity, specifically an aversion to thinking about investments. When despondent people start thinking again they become depressed. We characterize depression as a state in which people do not want to own stocks but they do not want to sit on cash; the end is not in sight; change is desired but nothing is trusted; so many questions remain unanswered the problem cannot be solved; turning to experts yields even more confusion because their opinions vary wildly. Asset values have recovered significantly from March 2009 which is requisite for people to move from depression to feeling hopeful. We think the start of feeling hopeful is marked by contemplation of questions about the recovery in stocks being for real or the evidence of stabilization being enduring. Continue reading →