Desperately Seeking Direction With US markets currently up over 6% in the first half of the year with very little volatility, it is perfectly normal to begin experiencing that uneasy feeling you get when it’s almost “too quiet.” It’s as if the traditional cycle of recovery‐to‐boom that we have become so familiar with has disappeared. During past traditional

Slow Return to Normalcy   “Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sir John Templeton   The world economies are growing, but they are doing so below their potential.  This could change in the second quarter of 2014, helping to stabilize what proved to be a volatile first

Top 10 Themes for 2014 “Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.” Donald Trump   Our 2013 view of the “year of optimism” (see the Skybox View January 2013) proved correct as the U.S. stock market rallied over 30% and

The Skybox View October 2013

Thursday, 10 October 2013 by

4th Quarter Outlook- Washington Bull and Bullish Markets   With the expectation and fervent hope that a “deal” will get done in Washington and this (yet again) political debacle will become a distant memory … we are equity bullish going into the last quarter.  The theme for the 4th quarter is“Monetary Reflation and Global Growth

The Skybox View August 2013

Tuesday, 20 August 2013 by

SHOPPING IN EUROPE…   I learned early in my investing career the value of diversification.  This entails having a sensible “balance” of stocks, bonds, and commodities in a portfolio. Of course, the balance can be static or dynamically managed (at Skybox, we prefer the latter) and it has proven to be a very effective investment

The Skybox View July 2013

Thursday, 11 July 2013 by

Should I Sell My Bonds?… Over the past quarter the stock market has continued its impressive run as stock prices rose and temporary pullbacks remain. Although the markets appear quite stretched at the moment in the short term, we continue to believe in the recovery and expect higher equity prices over the next 12 months. 

The Skybox View January 2013

Sunday, 21 April 2013 by

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” ― Winston Churchill

 

This year may finally turn out to be the one where “pessimism” finally gives way to “optimism” for investors. This is certainly a much more welcome emotion than the 2008 feeling of “depression” but still a distance away from “euphoria” that typically signals a market top (see diagram at the bottom of the page). Confirming this sentiment, consider the price to earnings (P/E) of the U.S. stock market. At just below 14 times forward earnings, one could argue that it is neither too expensive nor cheap. In fact, it leaves plenty of room for a multiple expansion, brininging along with the excitement and thrill that investors will receive if it occurs. Perhaps it will generate enough buzz to finally convince investors to move out of their low-interest cash accounts or rotate out of some bond holdings and into stocks once again. In our view, this is quite a realistic possibility in 2013.

The Skybox View September 2012

Wednesday, 06 February 2013 by

It’s a toss-up.  Whether you are debating who will win the U.S. Presidential election in November; or if Federal Chairman Bernanke will provide more economic stimulus with Quantitative Easing Three (QE3); or if the “Fiscal Cliff” of tax cut expirations and mandatory budget cuts will take effect beginning January 2013; or exactly how the European Central Bank will fix the Eurozone debt problems, it’s all a toss-up.

Of course, there are opinions on each of these matters.  Some opinions will keep even the most long term investors hiding in cash, while other views will make you want to scrape together every nickel you have to get it quickly invested.  We call this gridlock, when there are really no clear directions, leadership, or decisions  that an intelligent investor can use to make informed decisions.  The Skybox View, however, is that barring any major unexpected shocks, the markets should continue to grind sideways or higher by year end.  Valuations are still reasonable, interest rates are still low (for the time being) and any news of a European bailout or some sort or U.S. stimulus should send stocks, commodities, precious metals higher.  No news, however, should still keep prices somewhat in check while our investment holdings continue to generate dividend and interest payments.

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