Looking Forward provides us the opportunity to update our clients on recent developments and share our thoughts on current trends in the stock market and the economy. Produced quarterly, Looking Forward discusses our experiences as we apply our consistent, individual-company approach against an ever-changing backdrop.
September 30, 2019 – Conflicting signals. Volatility, for reasons ranging from lingering to topical, is on the rise. As we embark on the final quarter of 2019, now seems an appropriate time to recall Mark Twain’s 19th century observation about October: “This is one of the peculiarly dangerous months to speculate in stocks.”
June 30, 2019 – “The Consumer Confidence Index increased more than 10 percent from its January reading through its high in May. At the same time, exposure to the consumer discretionary sector among the portfolios we manage decreased by one-fourth. We’re comfortable with the divergence. Consumer confidence is an important indicator in an economy primarily driven by domestic consumption, but, by itself, it doesn’t influence a single investment decision that we make.”
March 31, 2019 – “The theory is that stock buybacks, by boosting earnings per share among companies that execute them, can lift share prices as the pool of outstanding shares shrinks. Considering last year’s nosebleed levels and the since-passed anniversary of the tax cuts that helped juice their rise, predicting an impending loss of buyback steam seems like a reasonable prognostication once again. So, trouble lurks, right?”
December 31, 2018 – “Just as 2018’s outlook didn’t determine its ultimate finish, the turbulence present at year’s end doesn’t guarantee a wild ride ahead. It’s reasonable to expect continued volatility because it’s been oddly lacking until recently, but direction and degree are perpetual question marks. We believe in patience and faith in the stock market’s most important tendency.”
September 30, 2018 – “It’s not so much what the Federal Reserve Bank said in the statement issued after its Open Market Committee meeting on September 26. The usual stuff, like the reminder about the Committee’s statutory mandate and the update on the risks to the economic outlook, was there in the familiar, dryly delivered pronouncement. But something was missing.”
June 30, 2018 – “We’re a lot less concerned about PCE (personal consumption expenditures) or CPI (consumer price index) than we are about EPS (earnings per share). That’s another way to say our strategy prompts us to account for inflation on a case-by-case basis, gauging the extent to which inflation affects each company’s earnings outlook.”