Investing and Economic Commentary

Many value investors like to talk about the concept of ‘time arbitrage’. The idea is that there’s an opportunity to earn outsized returns simply being more patient than the short-term oriented Wall Street crowd.
In an effort to keep clients better informed regarding changes in portfolios, we are continuing to send periodic updates after transactions are completed. As you may have already seen in your trade confirmations, we have recently sold Consumer Staples Select Sector SPDR (XLP),
You may have seen we recently added Apple (AAPL) to your portfolio. We view Apple as an innovative hardware, software and service company with a strong growth trajectory, trading at an attractive ~15.0x expected earnings.
With a mixture of excitement and a touch of trepidation, we are wading into the great Facebook debate. Warren Buffett famously said that it’s wise to be ‘fearful when others are greedy and greedy when others are fearful.”
A pull-back in the equity market can be psychologically painful for those focused on the short-term, but it also can create opportunities
On February 6th, 2018 we provided an update on the surge in market volatility. This came on the back of our comments during the Fall seminar when we highlighted just how unprecedented this stretch of low volatility had been.
On Friday, the Labor Department reported that our economy added 313,000 jobs last month, about 100,000 more than analysts expected. Additionally, the prior two months numbers were revised upwards as well. The unemployment rate remained unchanged at 4.1%.
In an effort to keep our clients better informed regarding decisions in individual stock portfolios, going forward, we will be sending periodic updates after transactions are completed. As you may have already seen in your trade confirmations, we have recently established a position in McKesson (MCK).
Market volatility has taken a huge leap over the last couple of days, and it looks set to continue this morning. Over last Friday and yesterday, the S&P 500 index lost over 6% of its value. This came as a shock to many since the S&P 500 has gone over 300 days since the last 3% decline. For context, corrections in the stock market of 10% have historically occurred about once per year, although we haven’t seen such a decline since early 2016. In an environment that is absent of otherwise normal volatility, investors can become complacent to risks that are not recently observed. This, in turn, can bring on a stronger reaction when routine market declines finally do return.
The same populist sentiment that created Brexit earlier this year in Britain carried through in the American general elections yesterday. Very few polls had given Donald Trump any chance of winning the presidency, yet as the night wore on, it became increasingly obvious that America was voting for a dramatic change in course and against the status quo of American politics.