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Good Morning!
If two weeks ago, an investor could have predicted that approximately ten well-known blue chip companies would either issue earnings shortfalls, predict weaker than anticipated business prospects or announce layoffs; that both the Producer and Consumer Price Indices would plummet; that most economic data would be weak; that there would be a scandal on Wall Street unlike no other; that JP Morgan would anticipate business during November was much weaker than expected - what would you have predicted the direction of the stock market?
Well, we are up over the past two weeks which begs the question, “have investors priced in this severe recession?” We think they have and as long as the news does not get much worse, we are in the processing of forming a bottom, a process that may last several more weeks, but will ultimately prove profitable for those brave souls with more than an eighteen month time horizon.
On the bond side, we continue to see opportunity unlike any other in our twenty-five year careers.
Dennis Fagan
Chris Fagan