Quarterly Outlook Summary

Our accounts have been performing very well this year largely due to two of our major holdings, Amazon and Oclaro. While these began as quite modest positions, they have grown sufficiently that they are both quite large in our standard portfolio. Consequently, as a caution, there may be some volatility in your account valuation month to month at least until we find an appropriate time to lighten the weight of each in our accounts. That time does not seem to be just yet.

The Presidential election seems to have everyone’s attention, especially at this time of an election year. In my experience and in my view, elections rarely if ever Continue reading

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Quarterly Outlook Summary

The economy remains sufficiently weak that the Federal Reserve has postponed any further interest rate increases until at least next year. One of the complicating factors was the recent vote in the U.K. to leave the European Trade Union. The vote to leave was expected to be close, but few thought it would succeed. The mechanics of exiting that will take place over the next several years and no one can realistically predict what the economic consequences will be. It is safe to say however, that the vote has introduced uncertainty and risk to the global economy which will affect Continue reading

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Quarterly Outlook Summary

The markets and the economy continue to muddle along although with some volatility. Even though the Federal Reserve has raised short-term interest rates one notch, longer term rates surprisingly declined slightly. Try as they might, the cannot generate any inflation as commodities and especially oil prices remain weak. The employment numbers in terms of job creation and unemployment look very good. Weekly unemployment applications are Continue reading

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2015 Year-end Summary

Last year was a difficult year for the markets, but we were able to eke out some positive returns due to a late December surge. That surge quickly melted in early January due to perceived economic weakness in overbuilt China and by a free fall in oil prices. The oil price decline is a short term detriment to the economy as oil investment quickly evaporates. It should also be a net positive in the long term as consumers and business acquire more Continue reading

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Quarterly Outlook Summary

The past quarter (and year) has been fairly brutal to portfolio returns due to high volatility stemming from factors I’ll discuss below. Immediately following the end of September, the market staged a surprising rally that at present appears to have legs. If it continues, this year will produce good returns after having been stagnant all year.

Much of the recent volatility stems from a lack of leadership from the Fed and Congress together with abundant speculation about what they will ultimately do in the form of Continue reading

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Quarterly Outlook Summary

The economy continues to grow. Unemployment is low and interest rates remain at zero. On the downside, labor force participation is the lowest since the 1970’s and continues to decline. Unemployment is declining because prospective employees have stopped looking for work. It is against this backdrop that the deficit continues to decline taking money out of the economy, Congress continues to look for more ways to cut spending which would take even more money out of the economy, and the Federal Reserve is looking for any reason whatsoever to Continue reading

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