We wish everyone a happy and healthy new year.
I have attached our most recent market commentary. We appreciate your continued interest.
“Que Sera, Sera (Whatever Will Be, Will Be)
It is somewhat arbitrary to make a forecast at year end. We focus on individual stocks but view them in the context of a portfolio. When the market declines it will bring down the good stocks and the bad but it is valuation that gives us the comfort the stocks can recover. In our reflection section we discussed how some recent movements in stocks can be misreported or misinterpreted by the media and some investors. Sometimes a strong thesis combined with strong price movements make some question why you should not jump into a stock or get out of one with weak price momentum. These strategies work until they don’t. Some stocks get over priced and stop increasing despite past price movements or valid underlying thesis.
Where do we stand on the markets? Some of the dividend paying stocks were grossly undervalued this time last year but they had been undervalued for a while. Today we still see good opportunities in the banks and other dividend paying stocks. We cannot forecast when the market will recognize the value in the stocks in your portfolio but collecting dividends while waiting is a nice way to get paid. The dividends, alone, are not a reason to purchase a stock. We have to see good value as well as dividends. We see no reason to change our approach to the market.
