2014 Letters to Clients


The past three decades have seen more market extremes than any reasonable person could ever have predicted. And each time these market extremes set in, the conventional wisdom as to where the “smart” money is being invested becomes just as extreme.

In the late 1980s and early ‘90s, Japanese stocks were king. U.S. investors were told that they should have a huge chunk – maybe even the majority – of their stock exposure in Japan, whose economy was thriving while the U.S. was mired in recession. Read More » 

After a long run of smooth sailing for stocks, volatility returned to the markets in a significant way during Third Quarter 2014. Daily swings in the Dow Jones Industrial Average of 200 points or more have become commonplace in recent weeks.

As we mentioned in this space a few months back, point declines are very much relative to where the market is. When the Dow is at a level of 17,000, a 200-point drop is actually a fairly modest decline, amounting to a percentage drop of only 1.2%. This won’t stop the media from trumpeting the news that stocks suffered a “huge selloff” on the evening news, of course, so it is important for investors to keep this in perspective. Read More » 

It was in this space just over a year ago that we addressed the rather distressing fact that the Dow Jones Industrial Average had just busted through the 14,164 record high it had achieved way back in 2007.

Wait…distressing? What’s so distressing about a record high in the stock market?

It seems quaint now, but many investors in early 2013 were ready to sell out of stocks at Dow 14,000 and move to bonds and cash, or at least reduce their stock exposure. Read More » 

There is an underground data storage facility in southeast Texas known, curiously, as the Montgomery Westland Bunker. For all intents and purposes, it seems like any of the other such facilities that have popped up all over the country in the age of cloud computing, designed to give large corporations a safe place to run redundant computer operations in the event of a natural or manmade disaster.

But the story behind the Montgomery Westland Bunker is decidedly unique; in fact, as the facility’s own website puts it: "The origins are complicated.  Read More »