Letters & Special Reports

These are my periodic letters, investment notes and special reports for clients and the interested. My general theme are to identify risks and search for opportunities in the biggest trends.

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Expect one regular monthly summary piece and occasional periodic reports.

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S&P 500

2014 Another Crossroads

2014 could be another crossroads in the economy and markets as we continue to emerge from the Great Recession. I am more concerned about mounting global financial risks again, I just want to reiterate that the United States sits, and frankly all of North America sits, in a very good comparative position. If we set ideology aside and focus on improving standard of living for everybody willing to work for it, the American Dream will continue.

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2013: We’re Still Here

Happy New Year! The new year will be a lot like an old year. Not 2012, but quite likely a lot like 2011, marked by increasing volatility and possibly a correction, before we begin a new leg higher in the markets. I reserve the right to be off by a year, but given a host of reasons covered in my year opening article for MarketWatch – Prepare for Zero Real Growth in the U.S. in 2013 (please read it) – it is time to err on the side of caution again as other investors decide to get back into the markets after several years.

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2012 Another Year the World Won’t End

Throughout 2011 we heard proclamations of doom and gloom from market pundits to gold traders to vote seeking politicians to assorted snake oil salesmen to the converts of ancient Mayan religion. Each has a version of a coming apocalypse, some including hyperinflation, 50% unemployment, widespread famine, world war or complete destruction of the globe due to galactic forces beyond our control. In my estimation, each is about as likely as the other to occur, that is, not very likely at all.

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2011 The Great Retrenching

In last year’s annual letter I broke tradition and wrote a piece full of predictions. Of the predictions, most of which were longer term in nature, some have come true already, others will take more time, a few will not come true. So, as time sorts out of what I said a year ago, we will take some time to review what went on in 2010 and how that will impact us the next few years. But first, take a second to reread my January 2008 letter where I warned “I believe that the problems at Bear Stearns are the tip of the iceberg regarding problems that are likely to emerge in the financial sector.” If you never read that letter, now would be a good time because some of the things I am going to say will be very challenging and that letter will help you understand my perspective.

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2010 A New Decade of Crossing Mountains

The Great Recession born of The Financial Crisis is lingering in many parts of America and the world. Investing will take perseverance and a forward looking approach. There will be more corrections, but we must try to use that volatility to our advantage. To that end, technology and eventually, clean energy, will be major secular trends to embrace.

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2009 Letter: 2008 Was A Whale of a Year

Beginning in 1999 and culminating in 2006, credit became very easy to attain.  Credit had in fact been pretty easy by historical standards since the middle 1980s, but in 1999 became very easy, and eventually, easy to the point of being silly in 2005 and 2006. There is enough blame to go around as to why credit loosened up to the point of absurdity, but in general it was the politicians, banks, investment banks, shadow banks and the Federal Reserve who are mostly at fault.

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2008 Letter: 2007 Was a Major Turning Point

2007 was a very eventful and fitful year in the stock and bond markets around the world. Credit markets finally started to shake the fleas that had taken residence over several years of record breaking money creation by government, lending institutions and a quasi-banking system composed of hedge funds and private equity firms. The volatility we saw in 2007 is not likely to subside in the short run. In fact, I believe that the problems at Bear Stearns are the tip of the iceberg regarding problems that are likely to emerge in the financial sector.

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