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Third Quarter 2017 Commentary and Review
Growth stocks enjoyed strong third quarter results, bringing our year to date return on a net of fees basis to 24.2% for the Broadleaf Growth Equity Portfolio. After lagging the major indices considerably last year, 2017 has been growth’s opportunity to shine, something we discuss further in the market review and outlook section, below. Our […]
First Quarter 2016 Performance and Commentary Review
The first quarter was a tale of two halves. During the first half, the stock market came under significant pressure as oil prices fell to new lows, broader credit concerns became elevated, and recessionary risks rose. The second half was marked by a bounce in oil prices on a hoped for production quota agreement from […]
NBR Nightly Business Report 8.26.15
Doug shares his thoughts at the 4 minute mark of this program.
Earnings Voids and the Emergence of Plausible Risk
We had put the finishing touches on a market update celebrating our first ten years in business, but were rudely interrupted by the first violence in the markets we’ve seen in nearly a year. Yes, a year. We don’t want to minimize the severity or swiftness with which many stocks have been hit in the […]
Second Quarter 2015 Commentary and Performance Review
The Broadleaf Growth Equity Portfolio (BGEP) enjoyed another nice gain in the second quarter, both on an absolute basis and relative to the S&P 500. Performance gains were relatively broad based, both at the sector and individual security levels. Technology and consumer discretionary related holdings were particular sources of strength during the quarter. Over the […]
Many Shades of Grey
We’re getting towards the end of earnings season, which provides a little breathing room to make a few comments on the overall market. The action has been choppy since the beginning of April, with a host of “firsts” leaving the typical investor more confused about the next move than necessarily concerned. As we mentioned in […]
Barron’s Big Money Poll
Doug MacKay, Broadleaf CEO and CIO, was quoted in Barron’s Big Money Poll, Spring 2015, commenting on the cautious attitudes of investors. For those of you who are subscribers, please click the following link: http://online.barrons.com/articles/u-s-money-managers-turn-cautious-1429925071
First Quarter 2015 Commentary and Performance Review
The Broadleaf Growth Equity Portfolio (BGEP) enjoyed a nice gain in the first quarter both on an absolute basis and relative to the S&P 500. Performance gains were relatively broad based, both at the sector and individual security levels. Technology and health care related holdings were particular sources of strength during the quarter along with […]
Nevis & NASDAQ 5000
Fifteen years ago, the tech-stock heavy, dot-com laden NASDAQ hit 5000, a level it hasn’t seen since – until today – March 2nd, 2015. Whether or not it will maintain a closing price above 5000 remains a work in progress, but in all likelihood, we’ll get there. To be honest, I wasn’t so sure that […]
Fourth Quarter 2014 Commentary and Performance Review
The Broadleaf Growth Equity Portfolio gained a solid 2.6% during the fourth quarter, bringing its full year return to 11.8%. While lagging the overall market’s return for the year, our results on a one, three and five year basis remain in the top half of our peer group and are in solidly positive territory. Our […]
Broadleaf’s 2015 Investment Playbook
It’s been a good year. The U.S. stock market has done well, gas prices are down at the pump, and the job market continues to improve. CEO confidence has returned, with merger and acquisition related activity finally joining stock buybacks and dividend increases as worthy uses of shareholder capital. The local builder is putting the […]
A Tale of Two Worlds
The U.S. markets enjoyed a strong open today but have experienced a slow bleed off the early morning highs. News of rate cuts in China and more serious discussion of quantitative easing (QE) as a policy tool in Europe have given a market leading bid to energy, materials, and industrial stocks today, leadership these sectors […]
A Moody Market
For those that may not have noticed, stock market volatility has been on the rise in October, with more up and down 1-2% days and powerful intraday moves than we’ve seen since the Great Recession. Weak overseas economies, fears over what rapid declines in energy prices could mean, and Ebola are just a few of […]
Third Quarter 2014 Commentary & Performance
Our portfolio enjoyed very strong third quarter results in both absolute and relative terms, bringing year to date returns slightly ahead of the S&P 500. While no one should focus on short term investment results, it’s amazing what a difference a quarter can make. The performance was relatively broad based across the portfolio, with notable […]
Broadleaf’s Mike Czekaj Recently Recognized As Top Analyst
Broadleaf’s very own Mike Czekaj was recently recognized as a top contributing analyst to the Estimize platform. Estimize is a place where over 30,000 buy-side, sell-side, and independent analysts can post earnings estimates on over 1,000 stocks, which are then ranked according to accuracy. He was also featured on their first ever analyst call to […]
Second Quarter 2014 Commentary & Performance
In absolute terms, our portfolio enjoyed a solid second quarter and while we recaptured some of the lost ground inflicted on high growth stocks towards the end of the first quarter, we continue to have work to do in catching the S&P 500’s 7.1% year to date gain. Our goal is to outperform our primary […]
First Quarter 2014 Commentary & Performance
Our portfolio had a tough first quarter, declining nearly 2% in an otherwise positive market environment. The last ten or so trading days were particularly difficult for fundamentally strong, high growth companies, a topic we explore more fully in the Market Review & Outlook section of this update. Our goal is to outperform our primary […]
What Happened on March 18th?
The last ten days of the quarter have been brutal for the market and in particular, growth stocks and the Broadleaf Growth Equity Portfolio (BGEP). March 18th sticks out as a unique date. Since then, the BGEP has experienced seven straight trading days of relative underperformance as compared to the S&P 500. For the past […]
The Economy of Trees
I have been keeping a personal journal for most of the past ten years. Rarely do I get time to go back and look at what I wrote but I have a long term retirement goal of typing down the volumes for my children someday. The Lord knows they will never be able to read […]
2013 STRIPs Annual Review
Founded in 2005 by Doug MacKay, Broadleaf Partners began as an institutional growth equity manager, and we continue to build out our reputation in that space. A need for more comprehensive portfolio management strategies emerged in 2009 when Bill Hoover joined the firm and brought with him a clientele that looked to Broadleaf Partners to […]
Fourth Quarter 2013 Commentary & Performance
The year finished on a strong note with the stock market gaining more than 10% during the fourth quarter and bringing full year results to a 32.4% gain, including dividends. While it was tough sledding for the BGEP on a relative basis for most of the year, we managed to just outpace the S&P 500’s […]
Third Quarter 2013 Commentary & Performance
The Broadleaf Growth Equity Portfolio (BGEP) enjoyed a very strong third quarter in absolute and relative terms, enabling it to catch up and surpass the S&P 500’s returns on a year to date basis after lagging for the first half of the year. While no single quarter establishes a trend, the results are a clear […]
What is the Most Important Factor in Hiring Investment Managers?
It might not be what you think! Click here for a short two minute video we ran across on the CFA Institute’s “Market Integrity Insight” blog.
A Letter to the President
Ten years ago, my son Pete wrote a letter to President Bush as a first grade class assignment following the events of 9/11. He encouraged the President to stand firm in his decisions and closed by asking if he was going to grow a beard or wanted to be on a coin. While my first […]
Second Quarter 2013 Performance Review
The Broadleaf Growth Equity Portfolio (BGEP) generated a slight gain during the quarter but lagged the indices’ more impressive results for the second quarter in a row. In general, our portfolio is geared to outperform in a more cyclically driven market environment than the defensive one largely experienced this year. The portfolio began to gain […]
The Fed’s Behind Home Plate
In recent weeks, I’ve learned that the catcher, next to the pitcher, is perhaps the most important position in all of baseball. The catcher is the equivalent of the Highway Patrol, CIA and FBI, all rolled up into one guy on the field. Unless the catcher proves to the other team that he is both […]
First Quarter 2013 Performance Review
The stock market and the Broadleaf Growth Equity Portfolio (BGEP) enjoyed strong first quarter gains even if our relative results were a tad underwhelming. The BGEP was very strong in January, but our results flattened during the last two months of the quarter while the stock market pressed onwards and upwards to new all-time highs. […]
World Economy Explained With Two Cows
This was recently passed along by some colleagues and we loved how simple and explanatory it was! Enjoy! SOCIALISM You have 2 cows. You give one to your neighbor. COMMUNISM You have 2 cows The State takes both and gives you some milk. […]
Broadleaf Partners recently featured by Business Insider
An excerpt from our most recent economic update, Flying High, was mentioned in Business Insider’s “5 Smart Insights for Financial Advisers” this weekend. Given the Wall Street Journal and several other media sources are pounding the table even more about recent stock market highs this weekend, we think you would be interested to hear our […]
Doug MacKay to appear on CNBC, Friday, February 22, 2013 at 11:00 am
Please tune in to watch Broadleaf Partners’ Chief Investment Officer, Doug MacKay, on CNBC’s Squawk on the Street this Friday, February 22, 2013 at 11:00am. For those of you unable to catch it live, a link to the video will be posted to the website when it becomes available.
Recent Facebook Thoughts from Doug MacKay
I’ve made it pretty clear that FB is one of my favorite stocks for the coming few years. I think they have the biggest runway of opportunities for growth and like the fact that many things appear open ended. If I can think of areas they could add value, I’m sure the number of opportunities […]
This is fascinating!
Provided below is a chart we found extremely interesting. It is a breakdown of inflation since 2000 in terms of the eight main components used to calculate the Consumer Price Index every month. Some of the growth in energy can obviously be attributed to growth in the emerging markets of the world over the last […]
Fourth Quarter 2012 Performance Review
The stock market treaded water during the fourth quarter, awaiting final resolution of the Fiscal Cliff. On that front, there was some positive midnight news on the final day of the year as Congress struck a deal on revenues (taxes), but predictably punted the question over spending to another day. That day will likely prove […]
An OPEd Worth Reading
We really enjoyed the attached OPEd piece in this morning’s Wall Street Journal as it reflects our current thinking and general views of the past year. While the world economic situation may not feel ideal, opportunity beckons in the United States. We really believe it!
Third Quarter 2012 Performance Commentary
In spite of well publicized worries over a dysfunctional government, the impending fiscal cliff, and slower earnings growth, the markets did what they usually do during such periods by confounding the experts. During the third quarter, the S&P gained more than six percent. The Broadleaf Growth Equity Portfolio (BGEP) gained a solid 5.1% on considerable […]
Second Quarter 2012 Performance Commentary
The stock market took a breather in the second quarter, falling 2.8%. If it hadn’t been for a stronger June, the results could have been worse. The Broadleaf Growth Equity Portfolio (BGEP) declined more than the S&P 500 as our positions in the consumer discretionary and technology sectors were pressured more than the market as […]
While Economic Concerns Remain, Corporate Fundamentals and Earnings Look Fine
Companies Owned: Sector Earnings Summary Rev Y/Y Surprise EPS Y/Y Surprise Consumer Discretionary 23% -9% 21% 25% Consumer Staples 9% 0% -10% 11% Energy 22% 1% 38% 0% Financials 16% 2% 49% 12% Health Care 21% 6% 6% 9% Industrials 19% 0% 17% 4% Information Technology 47% 4% 164% 140% Materials 18% 12% 26% 10% […]
First Quarter 2012 Performance Commentary
The stock market surged once again in the first quarter, gaining nearly 13%. Including the fourth quarter’s 12% gain, the S&P 500 has now increased 26% in the last six months, a blistering pace which has many wondering how long it can continue. For details on our firm’s performance results, our investment outlook, and related […]
Doug MacKay to appear on CNBC Thursday, March 29th at 10:35am
Please tune in to watch Broadleaf Partners’ Chief Investment Officer, Doug MacKay, on CNBC’s Squawk on the Street this Thursday, March 29th, at 10:35am. For those of you unable to catch it live, a video will be posted on the website when it becomes available.
Tooth Fairy Economics
Johnny lost a tooth last night. Unfortunately, the Tooth Fairy got carried away line dancing at the Thirsty Cowboy in Medina, Ohio too long to find out about it in time. Country band Coalie’s Run must have been putting on an excellent show but, hopefully, the Tooth Fairy will be back in business tonight. Speaking of which, […]
Crazy Good
Apple’s success is staggering. The company generated $16 billion in free cash flow this quarter, bringing their cash hoard close to a mind boggling $100 billion dollars. What the company decides to do with this huge cash balance may be key to future gains in the shares, which at current prices places the value of […]
Fourth Quarter 2011 Performance Commentary
The stock market enjoyed a nice fourth quarter rebound as the domestic political and double dip recession concerns that plagued the markets in the third quarter faded from memory. In spite of significant headwinds that remain in Europe and a slowing Chinese economy, the S&P 500 surged nearly 12%. In general, the views we shared […]
Daily Pops and Drops
The daily moves in the market have been amazing in recent weeks. I was curious to know how amazing, so I took a look at the daily performance of the S&P 500 since the Broadleaf Growth Equity Portfolio started six years ago. Since our portfolio’s inception – 1,583 trading days ago – the S&P […]
Morgan Stanley Hedges, Morphine & Athletes
This WallStreet Journal article on hedging activities that have recently backfired at Morgan Stanley once again made me wonder how so many smart people can get so wrapped up into attempting to get something for nothing. Personally, I think this behavior is the equivalent of welfare in the corporate suite, the promotion of the idea […]
The Value of Active Management
The debate over whether or not the higher fees earned by active portfolio managers are justified by a long term ability to earn market beating returns is a subject of endless debate in the investment community, one which has become nearly religious in its orientation. While there is no doubt that superior investment managers like […]
Third Quarter 2011 Performance Commentary
The stock market took a severe beating in the third quarter, declining by nearly 14%. Continued concerns about Europe and political and economic uncertainties in the United States made the stock market’s third quarter chart look like a fast twitch cardiogram. At this point, while the macroeconomic data increasingly points to the likelihood of a recession, the […]
Random Musings
The New York Times highlights another interesting MLB ritual in today’s paper. How can you not chuckle at rookie relievers made to carry gear to the bullpen donning Dora the Explorer, Barbie, and Tinkerbell backpacks? Electronic Arts slogan for its sports video games is, “if it’s in the game, it’s in the game.” I’ll be […]
Bumped by the US Downgrade
We were scheduled to appear on CNBC this morning to discuss the events of last week and where investors might find value in such uncertain economic and political times. Unfortunately our appearance will have to be rescheduled given the intense media coverage of Friday evening’s historic downgrade of our nation’s treasury debt. Since our prepared […]
Yellow Jerseys
Over the past two weeks, the media has been consumed by events unfolding in Washington, DC. While the coverage must be good for television ratings – who doesn’t like to whine about Congress – contemplating actual changes to your investment portfolio based on what happens with the debt ceiling debate could be a mistake without […]
Best House, Bad Neighborhood – US Bonds AND Stocks
A couple of weeks ago, our country’s bonds took a hit on a credit rating downgrade. The market voted and over a few short days, global investors continued to flock into US Treasuries as the safest of havens. This chart of YTD equity performance for several global markets also stands in stark contrast to all […]
More Comic Relief (The market was up 5% today.)
‘What’s this?’ the boss asks. ‘Ave you gotta no brain? Tree and tree and tree makes a nine,’ says the Italian. ‘Fair enough,’ says the boss. ‘Here’s your second question. Use the same rules, but this time the number is 99.’ The Italian stares into space for a while, then picks up the picture that […]
E Trade Baby Loses Everything
Even the E Trade Baby is having a tough time in this market. Enjoy this video, I sure did!
Bumped by the U.S. Downgrade
Our appearance on CNBC this morning was rescheduled due to the media coverage of S&P’s downgrade of the United States credit rating. We hope to be rescheduled soon. In the meantime, we wanted to share the thoughts we had prepared for the show as well as weigh in with our views of the downgrade […]
Doug MacKay to Appear on CNBC, Monday, August 8 @ 10:40am
Have the events of the past week left you wondering if there are any stocks worth buying anymore? Please tune in to watch CNBC’s Squawk on the Street show this Monday, August 8th at 10:40am, when Broadleaf’s Doug MacKay will be discussing where investors can find value in such an uncertain economic and credit environment. Doug’s […]
Yellow Jerseys
We have published our latest Economic Update, Yellow Jerseys, to our website. In this update, we discuss our love of the Tour De France each July, the sport’s similarity to investing, and the ongoing debate over the debt ceiling. Enjoy!
Second Quarter 2011 Performance Commentary
The second quarter, unlike the first, was a rocky one for the stock market. While earnings season remained strong, a number of event driven factors including Japan, Greece, excessive rain in the U.S., and rising food and energy costs weighed on leading economic indicators of the economy and eventually, the stock market. During the […]
Bytes Beat Bricks – Fortune Magazine
I thought the attached chart, Bytes beat Bricks, from this week’s Fortune Magazine was worth passing along. On the one hand, the technology industry is tremendously innovative, yet on the other hand, this also means that it can be extraordinarily disruptive. The former hand often explains why the best tech stocks always seem so outrageously […]
Chinese Entrepreneurs are Leaving China
I thought the following blog entry from Forbes was excellent. It just goes to show that the Laffer Curve concept is international in terms of its effects. Could we see a second brain/wealth drain as these entrepreneurial leaders in China move to country’s like the U.S. with greater freedoms? LINK: http://blogs.forbes.com/gordonchang/2011/06/05/chinese-entrepreneurs-are-leaving-china/ FULL TEXT: China’s […]
Broken Records
Our latest Economic Update, titled Broken Records, is available on our website. In this update, we discuss the market’s continued gyrations over the past three months within the context of an uninterrupted five month run.
There is Always a Way Out
No matter how bad things may get – at work, at home, your stock portfolio, or in your daily exercise routine – there is always a way out. Never lose hope!.
The Fed Loses Its Soul
I thought this piece, The Fed Loses Its Soul, was well done. My comments follow. The Fed Loses Its Soul By Doug Hornig The Federal Reserve is losing its soul. Considering all that it has put us through, you probably didn’t realize that the Fed even had a soul. But it does (soon to be did). […]
Silver & Gold, Silver & Gold
A new Economic Update, published last week and titled Silver & Gold, Silver & Gold, is available on our website. Enjoy!
What Your Tax Dollars Buy
Our friend, Karin Maloney Stifler of True Wealth Advisors, posted an interesting site on her blog that helps answer the question, “Where do my tax dollars go?”. We thought we’d pass it along. By clicking on http://www.whitehouse.gov/taxreceipt you can learn how much you personally contributed to various Federal programs and services. You’ll need three pieces […]
First Quarter 2011 Performance Commentary
The Broadleaf Growth Equity Portfolio continued to post strong absolute returns in the first quarter (+5.1%) and compared to the S&P 500 for the one, three, and five year periods ending March 31, 2011. For additional details on our firm’s performance, our investment outlook and related disclosures, please read the attached First Quarter 2011 Commentary & Performance.
Forgetful
We have posted a new Economic Update titled Forgetful to our website. In this update, we talk about our outlook for the economy and our investment strategy given the events in the Middle East and Japan. Enjoy!
Technology, Revolution & Choice
For some reason, this blog entry was published before it was finished. My apologies. Here is the complete version.*********It fascinates me to watch how the political unrest that started in Egypt has spread to other African countries, including Libya and Bahrain, and perhaps even Ohio and Wisconsin. There is no doubt in my mind that access […]
Let Yourself Feel Good Again
We have published a new Economic Update titled Let Yourself Feel Good Again. In this update, we discuss rising inflation expectations, the likelihood that the economy moves into expansion mode in 2011 and why you, as an investor, should care.
Former Tech Fund Manager Doug MacKay quoted in CNN Money
Paul LaMonica, a financial reporter for CNN Money, called to talk about the resurgence of some long lost tech stocks from the dot com era this year. He said he had read our update on Steve Jobs and Apple last month, where he learned that I had been a tech fund manager during the sector’s halcyon days. (That update was our most popular to […]
The Perfect Husband
Several men are in the locker room of a golf club when a cellular phone on a bench rings and a man engages the hands-free speaker function and begins to talk. Everyone else in the room stops to listen. MAN: “Hello!” WOMAN: “Hi Honey, it’s me. Are you at the club?” MAN: “Yes.” WOMAN: “I’m […]
Steve Jobs: Finding the Real Questions
For those that don’t know, Steve Jobs, founder and CEO of Apple Computer, announced yesterday that he would be taking another indefinite medical leave of absence from the company to focus on his health related issues. For those who were wondering — and apparently there are many given the media coverage of the subject — these are […]
Why Newton was Wrong
The Economist recently published an article on momentum in the financial markets titled Why Newton Was Wrong . While I believe that in some ways the article is describing a more general form of financial market momentum, these were my thoughts on the subject, which I similarly shared with the editor. To read the article you’ll […]
Fourth Quarter 2010 Performance Commentary
The Broadleaf Growth Equity Portfolio continued to post strong absolute returns in the fourth quarter (+9.1%) and compared to the S&P 500 for the one, three, and five year periods ending December 31, 2010. For additional details on our firm’s performance, our investment outlook, and related disclosures, please read the attached Performance Review.
200 Countries, 200 Years, Four Minutes
A former coworker just sent me this video which does a very clever job of showing the improvement in health and wealth of over 200 countries over the last 200 years. Pretty amazing visual, isn’t it?http://www.flixxy.com/200-countries-200-years-4-minutes.htmI turned 43 today. Two hundred years ago, I might have been at the end of my life, even if a […]
Christmas Break Video Fun
Like many of you, I get alot of funny videos sent to me every week.I thought these two British videos were particularly good. They are also kid friendly, meaning they just might keep the kids from killing each other for at least five minutes this Christmas break. British Animal Voice Overs:http://wimp.com/animalvoiceovers/My Blackberry Isn’t Working:http://www.youtube.com/watch?v=kAG39jKi0lIEnjoy!
The Year in Review
We have published a new Economic Update entitled The Year in Review. Please let us know your thoughts! Happy Holidays, Merry Christmas, and Happy New Year from all of us at Broadleaf Partners.
A Surprisingly Accurate Picture of Recent Economics
Mary is the proprietor of a bar in Dublin . She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks […]
CNBC Power Lunch Appearance
We appeared on CNBC’s Power Lunch yesterday, December 9th, to discuss the subject of bonds versus dividend stocks. If the video doesn’t appear above, click here for the link.
Trump Cards: Contagion or the Economy
I wrote this update relatively quickly last night; it is perhaps a little too deep for general distribution as an Economic Update. Seeing that I didn’t want it to go to waste, I thought it might be a perfect post for the blog. If nothing else, it should help you get some sleep tonight.*****************Last Spring, I […]
More Kid Quotes…Always a Good Laugh
Children Are Quick _______________________________ TEACHER: Maria, go to the map and find North America . MARIA: Here it is. TEACHER: Correct. Now class, who discovered America ? CLASS: Maria. ____________________________________ TEACHER: John, why are you doing your math multiplication on the floor? JOHN: You told me to do it without using tables. __________________________________________ TEACHER: Glenn, […]
The Buckeye Institute – An Amazing Tool for Public Worker/Taxpayer Accountability
Someone brought a website to my attention a few minutes ago, www.buckeyeinstitute.org. It is an amazing website that will no doubt generate tremendous interest and scorn across the state. Basically, you can look up the last five year’s of salary for any public employee in the state of Ohio. (ie teachers, policemen, firemen, etc.) For teachers, […]
Thanksgiving Pie
We published a new Economic Update entitled Thanksgiving Pie. In the update, we discuss our outlook for the markets following a sleu of recent economic releases and other newsworthy events of the past week. In general, we believe the economy is mending itself of its own accord in spite of fears that we’re only growing GDP […]
Fun with Pictures
I’m knee deep in earnings season. Every time I finish reviewing one earnings call transcript – they average fifteen pages – another company reports and the stack grows. It reminds me a little bit of raking the fall leaves. I could wait until all the leaves are down and clean them up all at once, but unfortunately our […]
Former Boss Ed Yardeni on CNBC, Google Earnings, Apple Expectations
Economist Ed Yardeni, a former boss of mine, was on CNBC’s Squawk Box this morning. While I haven’t talked to Ed in awhile, I thought his comments were spot on and sent him a quick note following his interview this morning. He responded with a quick thanks, congratulated us on our strong performance results over the last five […]
Herschel Walker says Mixed Martial Arts safer than Football, Nanook of the North, Archetype of World’s Best Athlete
Since I wrote our last Economic Update a few weeks ago, Chain Gangs & Pipe Dreams, two players on my son’s freshman team have broken bones (that I know of) and one has suffered a concussion. I also heard that a team out east forfeited a game for safety reasons; the opposing team’s offensive line had […]
Mortgage Rates Due for another Leg Down?
Mortgage rates are moving even lower with the average 30 year now at 4.2%. I would expect rates to fall even further, perhaps piercing 4% on the prospect of quantitative easing (QE) by the Federal Reserve in November. What is not clear, however, is whether banks will really want to refinance loans at rates that begin […]
Are You The Duck?
Ducks in Heaven Three women die together in an accident and go to heaven. When they get there, St.. Peter says, ‘We only have one rule here in heaven: don’t step on the ducks!’ So they enter heaven, and sure enough, there are ducks all over the place. It is almost impossible not to step […]
Third Quarter 2010 Performance Review
The Broadleaf Growth Equity Portfolio turned five years old at the end of the third quarter, marking a key milestone for our firm. In addition to having strong relative returns for the year to date and three year periods, we are pleased to report that over the past five years, we’ve managed to outperform the […]
Random Stats
“Get your facts first, and then you can distort them as much as you please.” -Mark Twain I saw the following interesting facts today. For the first time in 100yrs+, the percentage of adults 25-34 who have never been married has exceeded those who are married according to the Wall Street Journal. The article suggests this is […]
Chain Gangs & Pipe Dreams
We published a new Economic Update titled Chain Gangs & Pipe Dreams to our website this morning. In the update, we discuss highschool football, hedge fund manager David Tepper,and our thoughts on the recent new tweak to Fed policy. Enjoy! P.S. Bill turns 40 this Friday. Make sure you send him some love (and Geritol) when you get the […]
Dog Prayers
Dog Prayers
Cisco Dividend: You Heard it Here First
I rarely point out good calls that we make, but believe today’s talk of Cisco paying a dividend, if confirmed, is worth mentioning. According to briefing.com, Cisco just made the following comment today at their analyst meeting: “On the dividend, co agrees that the time is right in FY11, it sees a 1-2% yield.” We pointed to this likelihood […]
Pepper & Salt, WSJ 9/9/2010
Timely!!!
The Terminator Responds
I don’t often write notes to the Times or the Wall Street Journal, but Arnold Schwarzeneggar’s editorial a couple of weeks ago, which we blogged about, really touched a nerve for me personally. I sent him a note of encouragement and a copy of the blog entry via the state’s website and was surprised to […]
ISM Release Surprisingly Strong!!!
The ISM manufacturing index came out about fifteen minutes ago and was a surprisingly strong 56.3 compared to expectations of 52.9. Generally speaking a read of under 50 indicates contraction rather than expansion in the manufacturing sector. Given the decline in the markets, this data is having a huge positive impact on stocks since the […]
WSJ Book Review, Greece listens to the Terminator?
Naomi Schaeffer Riley reviews an interesting new book titled Crisis on Campus, by Columbia University professor Mark Taylor in today’s Wall Street Journal. I’ve read one of Naomi’s books in the past; she has been very successful as a journalist, particularly at such a young age. Miami University, my alma mater, made its budget woes public […]
The Terminator Nails It
Governor Schwarzenegger (aka Terminator) nails what I believe is one of the most pressing social/fiscal issues of a generation in an editorial in today’s Wall Street Journal. The social contracts of 20-30 years of service and then retirement in the public sector no longer make sense in the face of today’s competitive realities. (ie retirement at 45-55) The […]
Spooky Septembers
With the kids going back to school and Halloween now just around the corner (can you believe it?), I thought I’d share some “spooky” data surrounding the month of September courtesy of my friend Danny Hurwitz of BTIG Group. (source Bloomberg) The month ranks #1 in both frequency of losses and total losses since 1929. He tried looking […]
Broadleaf Birthday and CNBC Replay
If you didn’t get a chance to catch the live broadcast of our CNBC appearance this morning – also the fifth anniversary of our firm’s performance track record – please click here to see the replay. We are pleased to report that for the five year period ending 8/17/10, the Broadleaf Growth Equity portfolio has outperformed the S&P 500 by […]
Doug MacKay to appear on CNBC’s Squawk on the Street
Please watch CNBC’s Squawk on the Street show this Wednesday, August 18th at 9:35am. Doug will discuss our current market outlook and strategy with hosts Mark Haines and Erin Burnett. As an exciting sidenote, August 18th is also the five year anniversary of our firm’s investment performance track record, a significant milestone for our firm from a […]
Medicine for a New Normal
The end of summer marks an amazing period of transition for the modern American family. Until recently, I never understood why so many waited until the very same two or three weeks in late July and early August to squeeze in a last minute beach vacation. The trend is so pronounced that in […]
30 For the Future
We recently were made aware of an honor and I wanted to pass along the news. Broadleaf Partners President, Bill Hoover, has been recognized by the Greater Akron Chamber as a 2010 30 for the Future award recipient. Bill joins an impressive group of young professionals chosen for their contributions to their industries and communities. Congratulations Bill! […]
Caribbean Blue
I just returned from a family vacation last week where I took this picture and had a fantastic time. It was a strikingly beautiful and temperate place, with some of the most exotic sands I’ve ever witnessed. I even lost weight during the week, something that hasn’t happened since backpacking at Philmont Scout Ranch twenty-eight […]
Broadleaf Partner’s Second Quarter Performance Review
The stock market declined by just over 11% during the second quarter as European budget issues, the flash crash, the oil spill and continued sluggishness in the U.S. job market heightened concerns over the durability of the economic recovery. While stock market corrections are not unusual for this stage of the economic cycle, investor anxiety […]
Bed Pans and Bunk Beds
This past weekend, my wife and I packed the car and drove our family to Miami University in Oxford, Ohio for our twenty year, college reunion. The campus remains as beautiful as it ever was, but the people and memories are always what make a place feel more like a home. In this sense, it […]
Burgers, Parades and Baseball Games
The stock market continues to vacillate between the double dip and recovery crowds, but has also managed to hold the February lows now on two separate occasions. We believe that the domestic recovery remains intact and that European concerns and BP’s oil spill are exacerbating the typical shifting of gears that occurs at this stage of the economic cycle. To be clear, our […]
Style Diversification Map
I’ve always liked the above map of the market, which shows how different investment styles have performed each year going back to the early 90’s. A couple of observations stick out to me, while a third is not as obvious. First, leadership in most years appears to be relatively random, with styles not often repeating as top performers […]
Stock Splits and CNN Money
For the second time in two weeks, a company in our portfolio announced a stock split. I haven’t seen more than a handful of stock splits in the last few years let alone weeks. It may be another bullish sign for the markets, one that may indicate a move from economic recovery to expansion. On a different […]
Fighting a Good Greece Fire
For the first time since mid January, the markets have been under pressure. The last correction lasted roughly three weeks and resulted in a market loss of approximately 7% from the January peak to the February trough. This correction has lasted a little over two weeks and has resulted in a slightly larger market loss […]
Earnings Transcript Quotes of the Quarter (Isn’t that exciting?)
Frist van Paasschen – CEO of Starwood Hotels: On the hotel opportunity in India: “To say that India today is under-hotel-ed relative to future demand is a massive understatement. New York City alone has almost as many hotel rooms as the entire country.” On the improving economy: “Things certainly have changed since we last spoke […]
CNBC Video Link of Doug MacKay, Broadleaf Partners CEO & CIO, April 28, 2010
If you missed this morning’s CNBC interview, you can click here for a replay. Interviews generally follow the talking points provided to the show’s producers the day before the event. Occasionally, however, the interview will take a turn and focus on something else entirely. This was the case this morning with Goldman Sachs. While we do what we can […]
CNBC Appearance, Tomorrow Morning, 9am
Doug MacKay, CEO & CIO of Broadleaf Partners, will appear on CNBC’s Squawk Box at 9:35 am tomorrow morning, Wednesday April 28th. Tune in as Doug discusses the economy and the markets with show hosts Mark Haines and Erin Burnett.
Economic Update: Chocolate and The Mathematics of Loss
We have posted a new Economic Update entitled Chocolate & The Mathematics of Loss to our website. If you know of anyone who would like to receive our thoughts on the markets please let us know!
Indulging My Sappy Side
Okay, I honestly don’t think I’ve ever forwarded stuff like this before (yeah, that’s what they all say!), but I thought this was an excellent descriptive of what happens when you don’t keep life’s more important things in their rightful roles. Thanks Marnie! ******* The Mayonnaise Jar When things in your life seem almost too much to handle, […]
Another Sign of the Times: Eagle Scout Projects Go Global
Last night, I read an article about Alex Griffith, a young American Boy Scout whose eagle project involved building a playground at the Russian hospital where he was born and then adopted from some sixteen years ago. Alex spent 2 1/2 years and raised $60k for the project. The help of nearly five hundred volunteers from five countries was solicited using a broad, web […]
First Quarter Performance Review
Our first quarter performance and market commentary is now available. Please click here for our thoughts on what contributed to the quarter’s strong absolute and relative results as well as our outlook on the year ahead.
Spring Break Vacation
Yeah, I know it’s bad, but it still made me chuckle! Easter’s about more than eggs anyway. Have a blessed Easter, everyone, and if you’re travelling with your family as I am, be safe!
Much Ado about Google
Google has been in the news a great deal lately over their decision to exit the Chinese market on the principle of free speech. Google, whose corporate motto is “Do No Evil”, has decided that the revenue benefits associated with a Chinese presence aren’t worth the silent stand against free speech made complicit by offering censored search […]
Economic Update: Changing Seasons
We just published a new Economic Update titled Changing Seasons. Enjoy!
Map your Genome for $50k?
Today’s New York Times had an interesting article on the declining costs associated with mapping a human genome. This makes the age old, grade school ethics question a potential reality. “If you could find out what disease you might have or die from in the future, would you want to know that today?If someone gave […]
What to Teach College Kids
I serve on an advisory board for my alma mater’s business school, Miami University. The finance department formed this board a couple of years ago to help guide the curriculum of its students, better prepare them for careers in the field of finance, and foster relationships between students and alumni. Given the financial meltdown of the past couple of […]
Two Little Boys
A friend and reader of yesterday’s blog entry shares another funny kid story. Keep ’em coming!******Two little boys, ages 8 and 10, were excessively mischievous. They were always getting into trouble and their parents knew all about it. If any mischief occurred in their town, the two boys were probably involved. The boys’ mother heard that a preacher […]
Seven Reasons Not to Mess with Children
A little girl was talking to her teacher about whales. The teacher said it was physically impossible for a whale to swallow a human because even though it was a very large mammal its throat was very small. The little girl stated that Jonah was swallowed by a whale. Irritated, the teacher reiterated that a […]
Fun with Charts
My Excel charting skills are indeed amateur, but I nevertheless wanted to get a feel for the historical relationship, if any, between changes in the Fed’s discount rate and the stock market. If you hadn’t heard, the Fed raised the discount rate by 25 basis points after the close of the market last night to 75 basis […]
More Intern Jokes
Over five thousand years ago,Moses said to the children of Israel“pick up your shovel,mount your asses and camels,and I will lead you to the promised land”. Nearly 75 years ago,Roosevelt said, “Lay down your shovels,sit on your asses,and light up a camel,this is the promised land” … Now Obama has stolen your shovel,taxed your asses,raised the price […]
Men at Work, Intern Humor, Cisco Earnings
Men at Work stole Down Under Australian band Men at Work copied a well-known children’s campfire song for the flute melody in its 1980s hit Down Under and owes the owner years of royalties, a court ruled today (The Guardian). I’m going to have that song in my head for the rest of the day. My […]
Broadleaf Partners’ Quoted in CNN Money Line, Our Views on the Volcker Rule
Broadleaf Partner’s was quoted in CNN Moneyline this morning on our 2010 outlook for the markets. For the full story, click here. On another note, there has been a great deal of talk on new banking regulations and in particular the proposed Volcker rule. Paul Volcker was a former Fed chairman during the Carter and Reagan presidencies and […]
Easy Money
I’ve taken great interest in the masculine characters of several Clint Eastwood films recently, including Unforgiven’s William Munny and Gran Torino’s Walt Kowalski. This past weekend, I was also introduced to Robert Redford’s Jeremiah Johnson, a movie by the same name. These films elevate the state of manliness – even with its flaws – to […]
Earnings, Politics and Stock Prices
We are in the thick of earnings season and so far, the reaction of most stock prices has been disappointing relative to the great numbers most companies have been reporting. This may be another way of saying that a great deal of improvement in the economy was priced in with the gains investors experienced in […]
Fourth Quarter Performance Review
Our fourth quarter performance and market commentary is now available. Please click here for our thoughts on what contributed to this year’s 44% gain for the portfolio, lessons learned from 2009, and what may lie ahead for investors in 2010. Alcoa’s results last night represented the start to fourth quarter earnings reports which should shed some light on […]
Winter Poem
I found this beautiful winter poem and thought it might be a comfort to you. It was to me and it’s very well written. I hope that you enjoy it too . ‘ WINTER ‘ by Abigail Elizabeth McIntyre Shit….It’s Cold The End
Birthday Boy on CNBC This Morning
We were on CNBC this morning. At the end of the interview, Mark Haines wished me a Happy Birthday, commenting that I didn’t look a day over 50. At just 42, I should hope not!Joking aside, here is a link to this morning’s interview along with the comments I provided to the show’s producers ahead of time. ***A. […]
Looking Back at 2009
Each year at this time, I like to reflect on the year that was with the hope of gleaning a few nuggets of wisdom. With the caveat that the last two years have been anything but ordinary, these are our observations on 2009: 1.) Investment decisions made on the notion that “it’s different this time” […]
Shifting Gears
It has been quite a yawner for the markets since we published our last Economic Update, Painting the House, in mid November. The S&P 500, our proxy for the stock market, has moved in an uncharacteristically narrow channel since then, with 1090 as the low and 1110 as the high, a whopping 1.8% in heart […]
Selling Gold on eBay
As gold hit new highs last week, I remembered a gift my father in law had given Lisa and I on our wedding day a little more than 18 years ago. It took me sometime to find it, but I eventually did, buried under eighteen years of accumulated family video tapes located in one of my […]
Looking to 2010, Gathering your Questions
It has been quite sometime since I last published a blog entry. The good news is that I’ve been quite busy, the bad news is that this trend may continue. As a result, I will likely publish less frequently, perhaps just sharing my thoughts in the form of our periodic Economic Updates. If you would […]
Painting the House
It has been awhile since we published our last Economic Update and now that earnings season is largely over, the time is right for one. At the end of October, the markets began to weaken with many stocks – outside of Amazon – responding poorly to their earnings releases. In a blog entry at that […]
Correction Computations – Commonplace!
The double dip drum has been beating once again given the recent pullback in the markets. While any pullback is worth monitoring, it is instructive to consider that corrections are actually quite commonplace. In fact, we’ve had several 5% plus peak to trough corrections since the recovery began in March! Did you even notice? Here’s my chicken scratch math: During […]
Noontime Humor
The markets pulled back aggressively at 11:30am EST and are now down about a percent or so. According to some, the reason for the pullback was because of a reversal in the dollar and the fact that the markets hit upside resistance and couldn’t break through. In short, I think this latter comment implies that the markets have pulled back because they […]
I Wish I Owned Amazon and the Week that Was
If you own Amazon, you’re one happy camper. Unfortunately, I’m not one of them.The stock is up a whopping 25% after announcing great earnings, which included news that the Kindle (a product that they own and manufacture) was their biggest selling product in both units and dollars. This news gives the company a new Apple-like angle to […]
Words from Goldman, Pepper and Salt, Metallica with My 13 Year Old
While the markets are pulling back a tad today, earnings results so far – from the likes of Intel, JP Morgan, and Goldman – have been encouraging. Of particular note was a quote from Goldman this morning, which characterized the global economy as having continued challenges, but that “we are seeing signs of improvement and stabilization – even growth […]
The Earnings Parade
It is hard to believe, but it’s that time of year again. The earnings parade commences in earnest this week, with heavyweights Google and Goldman Sachs both set to report on Thursday. As we have said before, we believe that earnings reports will be particularly crucial both this quarter and next. It is true that […]
Broadleaf Partners’ Third Quarter Performance Review and Quick Thoughts on the Dollar
This year has continued to be a strong one for the stock market and for Broadleaf Partner’s Growth Equity Portfolio, which is up 35% on a year to date basis. For details on our performance, related disclosures, and insights on our current market outlook and strategy, please read the attached Third Quarter 2009 Commentary […]
Sitting on My Porch…Six Months Hence
Well, already it looks like the Browns are going to be in a world of hurt this season. After Brady Quinn had a dismal showing during the first half of their rout by the Ravens this week, my wife joined me outside to help cut down and prepare our gardens for the approaching winter. As […]
CNBC Video Link of Doug MacKay, Broadleaf Partners CIO, September 25, 2009
If you didn’t get a chance to catch the live broadcast this morning, please click here to see the replay. Today’s appearance was pretty short, but still worth the free PR it provides once every quarter or so. The Broadleaf background is new and must have helped as I had several emails from strangers on my Blackberry […]
Broadleaf Partner’s CIO Doug MacKay to Appear on CNBC, Friday September 25th at 9:35am
Tune into CNBC’s Squawk on the Street show with hosts Mark Haines and Erin Burnett tomorrow morning at 9:35am to hear our latest thoughts and opinions on the economy, the stock market and your investments. We will post the video clip and our thoughts for those that may miss the live appearance tomorrow afternoon.Thanks for watching!
Roth Conversions in 2010, Small Business Startups Pay Attention!!!
Converting a traditional IRA to a ROTH IRA and paying taxes on the converted amount today may save you significant taxes down the road. Up until 2010, the ability to convert has been limited to those with no more than $100,000 in annual income. But in 2010, all IRA holders will be able to not […]
Remembering 9/11
We originally published this entry two years ago after hearing a speech from 9/11 survivor George Sleigh. We’ve decided to republish it once again this year in memory of all those affected by the tragedy. ******************** George Sleigh, the 9/11 survivor shown on the right in this widely distributed picture, spoke to our church at our Saturday morning Men’s Breakfast […]
Seven Reasons to Be Bullish, All Today’s News
Now that Labor Day has come and gone, most of Wall Street has returned to work and trading volumes are picking back up. After moving sideways through the Dog Days of August, September has so far resumed the Up, Up and Away Trend established since March. The following news items from just this morning are driving out sized […]
Speaking of Cleveland…
A guy from Cleveland dies and is sent to Hell. He had been a horrible man his entire life. The devil puts him to work breaking up rocks with a sledgehammer. To make it worse, he cranks up the temperature and the humidity. After a couple of days, the devil checks in on his victim […]
Sitting on my Porch
The kids are in bed and it’s halftime of the Browns final preseason game. For anyone who knows me, that means that my wife has been totally zoned out watching the game. Browns games are one of the very few times of the year where my wife is pretty much useless, a complete role reversal […]
Thought to Ponder
Dave Rosenberg, former economist at Merrill and long time bear, points out that even after a five month 50 percent rally in the S&P 500, the index is still no higher today than it was on February 18, 1998. Including dividends, you’d have earned roughly nothing on your money in ten years.Dave points to this […]
Broadleaf Expands Workforce
Please join us in welcoming three new hires to Broadleaf Partner’s professional staff. Alyce Hoffman, Lisa MacKay and Kevin Arbogast will be serving the firm in various operating roles as we enter our fifth year of operations and grow our business. Alyce Hoffman, Operations Assistant, is a graduate of the University of Akron with a […]
The First Days of School, The Dog Days of August, and Pepper & Salt
Yesterday was the first day of school in Hudson, Ohio. Johnny, my youngest, enjoyed his first day of kindergarten. When he came home, I asked how it went and, without missing a beat, he said “Very well, I didn’t even have to go to the principal’s office.” Nicely done, Johnny, way to keep the expectations low. When my […]
Two Kinds of People
I have been blogging a little less frequently in recent weeks. Things have been busy (in a good way) and I simply haven’t had the time to comment as often as I’d like or as I’ve done in the past. If my blogs are a bit longer than usual, it’s because I may be trying to digest and relay my […]
Next Stop, Perfect Games, Pepper and Salt
Earnings are for the most part now in the rear view mirror. As a result, stocks may likely take their short term trading cues from macroeconomic factors in coming weeks. On this front, retail sales were a mixed bag today, with results for July below expectations in spite of the successful Cash for Clunkers automobile […]
Look Forward and Smile
Earnings season is winding down and now that Cisco’s results are out of the way, only a few major companies have yet to report. As is always the case, I’ve read through a boatload of earnings results and conference call transcripts and will pass along my generalizations shortly. But before I go there, I thought I’d […]
Notable Quotable
I forgot to share a notable quote from this season’s earnings calls. In describing the likely shape of this economic recovery — whether it would be strong and “V” shaped or double-dipping “W” shaped, Scott McGregor, President and CEO of Broadcom made the following quip.“… since it’s hard to tell the difference between a V and the first […]
What I Learned this Morning (Including Baseball)
Earnings. The flurry of earnings continues in earnest and so far, things have been decent but not outstanding. I have been extremely impressed by corporate America’s rapid cost cutting efforts which have boosted bottom lines and will hopefully provide leverage once revenue growth returns. Residential and Commercial Real Estate. Several data points have come out recently […]
Avalon, the Beach, and the Jersey Shore
Last Sunday night, at 1am in the morning, my wife and I made the spontaneous decision to take the family on a last minute beach vacation to Avalon, New Jersey. We decided to make the trip earlier that day after our son’s final baseball game of the season, but waited to tell the kids until we woke them […]
Recent Thoughts
Gains ahead for financials? JP Morgan and Goldman Sachs both reported strong results, reflecting their success in taking significant market share from substantially weaker competitors. Cisco Systems, along with other leading technology players, was similarly able to take share from weakened competitors following the tech wreck earlier in the decade. Does this mean Goldman and JP Morgan are buys? Perhaps, but I’m not […]
All Aboard!
Over the last few weeks, the market has dropped its hyperactive fear of inflation (a fear we did not share) and has recently been obsessing over deflation. During the former period, we suggested that inflationary concerns weren’t the reason for the backup in government bond yields as corporate bond yields hadn’t experienced a similar backup. After all, inflation would affect the value of […]
Acid Rain, Nukes, and A Diesel Rabbit
Do you remember Acid Rain and No More Nukes? When I was in high school a couple of decades ago, there was significant political and media attention paid to the potentially disastrous impacts that acid rain would have on the environment. Acid rain, it was proposed, would cause untold damage to wildlife, vegetation and mankind if left unaddressed. I […]
Second Quarter Performance Commentary and CNBC Appearance
This year has been a strong one for the stock market and for Broadleaf Partner’s Growth Equity Portfolio. For details on our performance and insights on our current market outlook and strategy, please read the attached Second Quarter 2009 Commentary & Performance. Doug will also be sharing his thoughts on the market with CNBC’s Squawk […]
Quarter End Silence, Economic Datapoints to Watch, and Welfare Independence
We’ll be very busy for the next week or so as we complete our quarter end activities. As a result, it will also be a little quieter on the blog front. Please bare with us.The good news is that it was a great quarter for the stock market and for the Broadleaf Growth Equity portfolio. Subscribers to our economic […]
The Wrong Questions, 1965 Medicare Budget Estimates, FF on T Shirts & MJ on I Tunes
Ben Bernanke got a major grilling from Congress yesterday over whether or not he had threatened to replace Ken Lewis and the entire board of Bank America if he didn’t follow through with the acquisition of Merrill Lynch last fall. While Ben denied making any such threats, Ken Lewis apparently still felt pressured, or at least several […]
Fund Flow Funk
I like this chart from JP Morgan. As many of you know, I strongly believe that fund flows into and out of equity funds are a huge and often overlooked determinant of stock market returns. In particular, when fund flows go wild after certain sectors, those sectors tend to do well, but when they are in a funk […]
Wait and See Attitudes
The World Bank may be driving markets lower today on its disappointing outlook for worldwide economic growth this year – down 2.9% – and a tepid outlook for 2010. The truth, of course, is that no one knows what’s responsible for moving the markets on any single day. Here’s my two cents. I think we’ve had a […]
Health Care, New Financial Regulations and an Obama like Clinton
Health care stocks are enjoying a nice rally today. In fact, they are leading the markets higher for the first time I can remember in a very long time. What’s also different about today’s move is that it doesn’t appear to be related to a reemergence of the defensive trade even though the market has pulled back some from its recent […]
Natural Gas, Roth IRA’s, and Pepper and Salt
In recent weeks, I have been a buyer of late cyclical stocks, including energy, materials, and industrials. Within the energy space, I’ve really been interested in natural gas plays. I saw a chart that came across my desk this morning from Jason Trennert at Strategas Partners that made natural gas appear even more interesting as […]
Technical, Practical, Theoretical; Observations on Bonds and Inflation
Long term treasury yields have backed up above 4% today, making a significant move off their lows in the 2’s a number of months ago. While there are a number of folks claiming that this back up in yields reflects a change in inflation expectations, I’m not convinced. From a technical perspective, if inflation were […]
Bear Market Bubbles
New unemployment claims came in at 345,000 this morning. The bad news is that 345,000 more people lost their jobs, but the good news is that there has been a clear inflection point in the rate of change. A couple of months ago, new claims peaked at over 600,000. Many forecasters expected this morning’s number to come in at around […]
Continuing Strength
The markets have continued to do very well, moving above their 200 day moving average for the first time in eighteen months. Yesterday’s ISM index continued to improve in April as it had in March. While it is not yet signaling an expanding economy, it is getting closer. Several commodities are also setting new shorter […]
Milton Friedman by Stephen Moore and Phil Donahue
Stephen Moore wrote this excellent editorial today on Milton Friedman, a proud father of global capitalism, who passed away in 2006 at the age of 94. Friedman – like Reagan – had a way with words that helped capitalism to become a populist ideal. Unfortunately, socialism is becoming the new populist.If you haven’t seen this you tube […]
Consumer Staples and the Reflation Trade
Readers know that I’m intrigued by the prospects for consumer staples stocks. While we don’t own anything in the space currently, this is largely because the area has tended to underperform during cyclical recoveries in the economy. Historically, the space is a safety play or defensive sector of the market. The view is that people use […]
Kids Say the Darndest Things – Art Linkletter on YouTube
A friend passed along the following YouTube clip of Art Linkletter interviewing children on his television show. Kids do indeed say some of the Darndest Things! This will make you laugh out loud!Art Linkletter on YouTubeEnjoy your Memorial Day weekend and remember — in between the burgers and dogs — to give thanks to all of our uniformed […]
Answering Your Questions
A few of our friends and clients have been asking specific questions on our views of the market in recent days. We thought we’d share our responses.1.) Given the market correction, do you perceive securities and other market instruments are at bargain prices? If so, where are the bargains? We believe many areas of the market remain bargains […]
More of the Same, With a Twist
Most of the economic data in recent days has been consistent with a “less bad” economy, but with a twist. After a month or two of “less bad” readings, expectations for economic indicators like employment and retail sales have started to trickle upwards. While reported readings for these indicators in recent days were still “less bad” than […]
Thinking about Higher Gasoline Prices
The biggest news in recent days, in my opinion, has been the rise in oil prices and gasoline at the pump. Where I live, I’ve seen prices climb from roughly $1.94 per gallon to $2.40 per gallon in about ten days. I’ve long felt that a return in oil prices to $50-60 a barrell might […]
Why God Made Moms; The View from the Second Grade
To all the Mother’s out there, Happy Mother’s Day! — The Sons of Broadleaf Partners************WHY GOD MADE MOMS All answers given by 2nd grade school children to the following questions: Why did God make mothers? 1. She’s the only one who knows where the scotch tape is. 2.. Mostly to clean the house. 3. To […]
Today’s News
There is a sizable divergence between the performance of the S&P 500 today, up about 1%, and the Russell 1000 Growth index, which is down slightly. The S&P 500 has a greater exposure to value stocks than the Russell growth index. Today’s difference, may largely be a function of the out performance of historically value oriented […]
Learning to Ride
Yesterday, my five year old son Johnny learned to ride a bike. It was late in the evening and close to getting dark, but we had been talking about an attempt “sans” training wheels all day and so I said okay. Removing the training wheels, I took his bike to the back yard where the grass was soft […]
The Road to Recovery
We have published a new Economic Update titled The Road to Recovery to our website. For an up to date view of our thoughts on the market and an elaboration on yesterday’s entry, please check out the link. Doug
Catching Up
I’m hoping to put some more substantial thoughts into an update soon, but have been bogged down by this earnings season. So, here’s a real quick summary of our current thinking on recent new data points.1.) The market has continued to move higher. If the current rally, up just shy of 30%, proves to be of a […]
Insights from Google
Each quarter seems to have a rhythm to it in the investment management business – at least from where we sit. As a quarter winds down and comes to an end, we spend a fair amount of our time communicating those results to our clients and investors in writing, over the phone and face to face. After this […]
The Flop, The Turn and The River Part II
So far, the economy’s new cards have looked pretty good, at least compared to where we’ve been. Fed officials were on record last week claiming that the “worst” of the recession may now be past us and Treasury Secretary Geitner said he doesn’t see a second round of banks collapsing. (To be fair, I don’t think he saw the first […]
The Flop, The Turn and The River
Continuing yesterday’s poker analogy, let’s take a look at the cards dealt from today’s deck of economic data. (Aka, the “flop”.) Card #1. The Philadelphia Fed Index was similar to the Empire Manufacturing Index, suggesting that while contraction in the economy is still expected for April, the rate of decline has slowed. The most notable component of the report was the jump […]
Navel Gazing
As we head into earnings season, I’ve been reviewing the performance of different stocks and industry groups over various time periods, including year to date and from the market lows in both March and last November. One observation that clearly sticks out in the data is that defensives like health care, staples, and utilities have lagged the market, while […]
Green Shoots and New Life
Pepper & Salt, The Wall Street Journal 4/11/09As we move into springtime, Wall Street has been using the term “green shoots” a great deal to describe signs of potential new life in the economy. The bears of course are warning against a dangerous late term frost that will likely kill these delicate “green shoots” as quickly as they’ve emerged. (Perhaps the bears should stay […]
Giant Pictures Paint A Thousand Words
First of all, my apologies for posting such a massive chart. I tried to make it smaller, but it wasn’t readable and links just don’t jump out at you like a picture does. Anyway, this graph shows the annualized rates of return on the S&P 500 for each year, going back 182 years. The red block is 2008. […]
Things to Watch
Earnings season is always ushered in by the results of Alcoa – which reported last night – and then picks up steam, ending in a crescendo of conference calls four or so weeks later. We have had a nice bounce off the lows so it will be interesting to see not simply what companies report, but what […]
Valleys, Foothills and New Mountains
It’s hard to believe, but it’s been another great week for the markets, the second in a row! Let’s hope it’s habit forming! So now what?Our basic premise remains the same. While the S&P 500 briefly violated its 740 lows this quarter, it may have seen the devil itself at 666, when it made an aggressive about face […]
Hocking Hills, The Markets, and A Dusting of Snow
I took a short spring break last week with my family and visited the amazing landscape of Hocking Hills based in southeastern Ohio. If you’re looking for a fun weekend trip, I’d give it an enthusiastic nod. The terrain reminded me a great deal of northern California, thanks to the many hemlock evergreens brought by glacial deposits from Canada millions of years […]
Pepper & Salt, The Wall Street Journal, 3/18/09
The Broadleaf blog will be on Spring Break next week, so we’ll leave our texting to the Pileated woodpeckers out there.While the markets have pulled back a tad in the last two days, it has been a good couple of weeks. Hopefully, we will return to the office next week with more green on the […]
E Gads Moments and This Morning’s CNBC Clip
For those that may have missed our CNBC appearance this morning, here is the clip , which should be available for the next week or so. The interview went well and we actually succeeded in getting a laugh out of host Mark Haines, which may be an accomplishment in itself. In the interview, we discussed […]
Less Bad
Less Bad. Those are the operative words of the past week. Retails sales, housing starts, new claims, company survey work, company stocks hitting new lows…all have been “less bad” than feared in recent days or realized in recent months. “Less Bad” doesn’t always mean “Better Days” are immediately ahead, but it is a precursor for when those days eventually come. Today, […]
Something for Nothing, Free Lunches, and Fool’s Gold
On the positive front, the market is posting nice gains today, up over 2%. Retail sales, excluding autos and gas, were up a surprising .5% month to month, clearly much better than the market had been expecting particularly in light of all the job losses. While discounting is playing a role here, it is encouraging to know that price […]
Pure Filth
The markets are enjoying a nice rally today likely spurred on by Citigroup’s comment that they were profitable during the first two months of the quarter. Bank of America, JP Morgan and Wells Fargo made similar comments in recent days, but only Citigroup’s comments have had the power to move the markets up as they […]
The Daily Show with Jon Stewart: A Humorous Rebuttal to Santelli and Cramer
In the past two weeks, I’ve posted comments made by Rick Santelli and Jim Cramer from CNBC. This segment by The Daily Show with Jon Stewart is a humorous rebuttal to their rants and a reminder to always be suspicious of anyone who tells you they saw the economic crisis coming.In fairness to Rick Santelli, he has consistently spoken up against all […]
Cramer’s Response to White House
Jim Cramer published this letter this morning in response to White House criticism of comments he had made in this Today show interview on March 3rd. Whether you are liberal or conservative, it is worth reading. Cramer voted for Obama but believes, as I do, that some of the recent policy initiatives in the budget are far too radical for an […]
Today
It’s Wednesday and the markets are acting a tad better. I am becoming increasingly convinced, based on conversations with others, that the market’s latest downdraft through the November lows is related to Obama’s ambitious plans. Hopefully, he will look to the response of the markets for some guidance on the longer term wisdom of his plans as Clinton […]
Messy
I took Friday off to go skiing in Western New York. When we arrived at Peak N Peak, it was about fifty degrees outside and raining cats and dogs, so we took a pass and continued to a friend’s house on Chautauqua, where we proceeded to eat, play poker, and watch more movies than I […]
Caressing and Stressing, Shopping and Rebalancing
The S&P 500 came within a point of caressing the November lows yesterday and is bouncing a tad today. I wouldn’t say that anything new has surfaced over the last few months to suggest that further weakness is likely beyond these levels. Surely, whenever you see a retracement, it means that the bears are in control. Many strategists […]
Rick Santelli CNBC Rant
If you read our blog or subscribe to any blog for that matter, you have probably already seen this morning’s CNBC video clip of Rick Santelli speaking up on the government’s mortgage bailout plan. But if not, it’s worth viewing here. The video is making its way around the internet and I’m sure will find itself […]
Black Holes and Red Giants
As I write, there are a number of market technicians calling for a rally in gold to $2,000 an ounce and for the stock market, measured by the Dow, to fall an additional thousand points or so to 6500. While I do pay attention to technicals, they are also momentum based strategies, that generally hold […]
A Tough Tape, Market Valuations, and More Thoughts on the Banks
After an extended three day weekend, the markets reopened yesterday and sold off aggressively, closing at the lowest levels since November 20th. There have been many reasons proposed for the recent declines, including a buy the rumor sell the news mentality following the passage of the stimulus plan, a new fraud uncovered by the SEC, […]
Stimulus?
I have been relatively quiet on the whole Stimulus debate. A client, however, forwarded the following Bloomberg article on some of the health care provisions within the plan as well as some anecdotes regarding his own difficult experiences with health care in Canada, a system where it has been socialized. His stories were a bit disturbing, to […]
Crying Uncle, Hot Potatoes, and Musical Chairs
After a strong showing on Monday, the markets pulled back aggressively yesterday as folks were largely disappointed by the Treasury Department’s plans for helping the banking system. It was a clear case of buy the rumor, sell the news.We continue to believe that an RTC type bad bank structure could be an effective solution. The new […]
Bill Hoover Joins Broadleaf Partners as President and Chief Operating Officer
Bill Hoover Joins Broadleaf Partners It is with great pleasure that Jeff and I announce the arrival of William Hoover as President and Chief Operating Officer of Broadleaf Partners, LLC. Bill joins our firm as an equity partner after spending over sixteen years at Wall Street wirehouse firms serving the financial needs of high net worth […]
Markets Making Progress on Positive Datapoints
The markets have been making some positive progress today. Each day of this troubled earnings season that goes by and we don’t touch or break the November lows is a very positive and constructive sign. There have been some hints of positive fundamentals, including the following, in recent days. The ISM non-manufacturing services index yesterday came in […]
Thoughts for Today
Waking up to what the day holds can be difficult in an economy like this. While I generally expect things to be tough for most companies out there, it is nearly impossible to predict how the stock market will react. One of the toughest parts of a performance driven job, where you can be judged by […]
A January Dud, Bad Banks, and Earnings Insights
The markets have continued to sell off, heading towards but not yet hitting levels last seen in November. After a nice bounce off the November lows, January turned into a dud, the biggest one for the S&P 500 in over one hundred years. If you are superstitious, you’ve probably heard the notion that as January […]
The Presidents
Over the past few days, I have been watching a history series on the American Presidents, past to present. The series, which I recorded from the History channel, covers the Presidents in order and includes commentary on their major accomplishments and failures over about eight hours of video. While it has been quite some time since I’ve taken […]
Bad Banks and the Land of Loan Quarantines
Financial stocks are ripping upwards in the aftermarket on rumors that the government may be getting closer to establishing a Bad Bank that would accept troubled loans, similar to the Resolution Trust Company that proved successful during the early eighties Savings and Loan crisis. In the Book of Leviticus, God tells Moses to impose quarantines on […]
Markets Manage Gains in Spite of Rising Layoffs
In addition to layoffs at Summitville Tile, the family which owns my beloved Spread Eagle Tavern located here in Ohio, the Wall Street Journal also reported on a host of other job cuts at many major organizations this morning. Among the layoffs: Home Depot, 7000 jobs Caterpillar Tractor, 20000 jobs Texas Instruments, 12% workforce reduction Sprint , 8000 jobs IBM, 2800 jobs Pfizer/Wyeth merge, 10% […]
Recent Market Action
The markets have resumed their pattern of large daily swings. Much of the volatility has been centered within the banking sector (down 17% Tues, up 16% Wed, down 8% today), where loan loss provisions are increasing and uncertainty is back to extreme levels as many banks cut their dividends to bare bones levels. There are some who […]
Quote of the Day
“Obama was sworn in 1.5 hours ago. Why isn’t the economy better? I voted for change.” – Tongue in cheek humor from a friend and Obama supporter. *****************The markets have been selling off most of the day, but all eyes on Wall Street have been focused on the historical inauguration of President Obama.Nothing, of course, will be resolved overnight with […]
Nice Editorial by Colin Powell, Today’s WSJ
Here is a nice editorial written by Colin Powell, in today’s Wall Street Journal, just in case you missed it.Enjoy the rest of your weekend.
Far Fetched
Only six months ago, I was visiting a large, privately held company and the subject of skyrocketing commodity prices entered the discussion. When I commented that inflation trends were likely headed down as the boil came off emerging market economies, one executive looked at me as though I had to be out of my mind […]
Wide Tail Observations from Stifel Nicolaus
Friends at Stifel Nicholaus passed along the following observations from Richard Cripps, CIO at the firm. The last year – to be sure – has shown us that the highly improbable has been uncharacteristically commonplace, but I still say it is alot more fun to hope. I for one, am sick and tired of Black Swans. Besides, if they […]
Revisiting Lows
After enjoying a nice twenty percent rebound from November 20th through the first week of this year, the markets are pulling back aggressively once again and threaten to test their prior lows. The reasons are always difficult to pinpoint, but the fact that we are headed into earnings season probably has as much to do with it […]
Sign of the Times
Much of our quarter end reporting season is winding down, so we hope to be back blogging in the coming weeks on our thoughts about the economy and the stock market. Our overall gameplan for 2009 remains the same. We expect the markets to trade in a wide range of 740 (the 2008 low) to 1100, with plenty […]
Fourth Quarter Portfolio Review and Commentary
The financial markets finished 2008 on a tough note. In fact, it was the third worst year in the last century for investors. Fortunately, it won’t take much to make 2009 better. For details on our portfolio’s fourth quarter performance results and our thoughts for the coming year, please see our Fourth Quarter 2008 Commentary […]
Thoughts for 2009: CNBC Talking Points, December 29, 2008
Here are the thoughts we prepared ahead of this morning’s CNBC appearance. *******Thoughts for 2009. 2008 Destroyed Capital. 2009 Should Repair/Rebuild It. Economic Overview Unemployment will increase significantly, perhaps to as high as 10%. GDP continues to decline, but starts to stabilize at some point during the year. The financial markets start to do better, leading […]
Ohio Proud
It will certainly be a quiet trading day on Wall Street. Other than Amazon saying they had record unit sales this holiday season, nothing else has been very newsworthy. For about every other retailer, it will certainly go down as a season to forget.For those interested in switching gears, here’s a nice read on Ohio for a change. For […]
Christmas Gift, 2008 Style
A friend mine has a daughter who loves horses. This year he bought her one for Christmas. Unfortunately, this is all he could afford. Down markets can be pretty tough!
Looking Back at 2008
Each year at this time, Jeff and I like to reflect on the year that was with some hope of gleaning wisdom for use in the future. With the caveat that this unusual year was a complete and utter mess for the markets, here are some observations. If the returns seem too good to be true, they probably […]
Reader Comments on Madoff Blog Posting
A reader who happens to be a securities lawyer just sent the following comments on our most recent blog entry, Weighing in on Madoff and SEC Exams. “When I learned about the Madoff situation, the first name that came to mind was Richard Whitney. As you probably know, Whitney was President of the NYSE and […]
Weighing in on Madoff and SEC Exams
For anyone who has been watching the business media lately, the details surrounding Bernie Madoff’s huge $50 billion ponzi scheme is both amazing and heart breaking. Amazing in that it went on for so long without being caught and heart breaking for all the investors, including many charities, that lost billions. The only comfort I take in […]
Pennyland, Echoes of the Great Depression
A reader of Friday’s blog entry writes, “I saw your post A Historical Peek at Past Depression Talk. I think you may be interested in “Pennyland – Echoes of the Great Depression” — which I created from an original song written by my brother. Here’s the link to the video: Pennyland, Echoes of the Great Depression […]
A Historical Peek at Past Depression Talk
Our friends Jason Trennert and Nick Bohnsack at Strategas Research Partners suggest that the talk of a new Great Depression has been prevalent during many major periods of economic weakness. We thought we’d share the historical headlines from various newspapers they uncovered. And as shocking as the discovery of Bernard Madoff’s $50 billion ponzi scheme seems today, such revelations, unfortunately, also seem […]
Random Thoughts
The stock market has continued to rally in spite of very troubling fundamental and economic news. This is a good reminder to investors that at some point, bad news becomes priced in and we should no longer fear the potential of bad news on price. In fact, stock prices can and have moved up into bad […]
Quote of the Day, Warren Buffett on recent Short Term Treasury Auction
Buffett’s sent this email to his board after hearing that Treasuries have hit 0% – “This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big way through our furniture operation. Now mattresses have become fully competitive as a place to put your money, and sales will […]
Mortgage Rates, A Treasury Bubble, and Oil’s Comeuppance
Thirty year mortgage rates have tumbled almost a percent to about 5.5% in the week since the Fed and Treasury department started making purchases of mortgage bonds in the open market. It looks like this most recent approach to stimulus seems to be working given the positive market response. Apparently refinancing applications have doubled in the last week, which should […]
Doug MacKay, Morning CNBC Appearance
As some of our readers may know, we are occasional guests on CNBC’s Squawk on the Street Show with Mark Haines and Erin Burnett. We were on the show this morning, sharing our thoughts about the markets and how investors should be positioning themselves in this very trying tape. Rather than writing some thoughts down for […]
Pictures and Observations from a Friend in the Business
Here are some morning observations and pictures from a friend of mine in the business. “Well…..numbers on Black Friday a bit better (maybe the $1.55 gas I saw over the weekend helping a bit)…..I know we (have been) cranking out some fairly bearish prognostications…but when I see images like the one below…and the from the […]
Thanksgiving
According to a note I read yesterday, of the 11,585 U.S. and international stock mutual funds tracked by Morningstar, all but one had lost money this year. As we head into the Thanksgiving holiday, this fact offers a nice opportunity to be thankful for and reflect upon things other than the size of our bank accounts. The following […]
WSJ Article: Fear & Frustration, Some Calling it Quits
Today’s Wall Street Journal provided a profile on several investors who were calling it quits, moving to cash in the face of what has been a horrific market. I know that things have been extremely tough. It hasn’t been fun. But what interested me was the statement by one investor that he has moved from a […]
Comic Relief Friday
Questions and Answers from an AARP Forum Q: Where can men over the age of 60 find younger, sexy women who are interested in them? A: Try a bookstore under fiction. Q: What can a man do while his wife is going through menopause? A: Keep busy. If you’re handy with tools, you can finish the […]
Are You Too Confident?
If you haven’t been humbled by this market, then perhaps this test will offer some assistance. Research shows that we tend to be overconfident when we guess at the range of answers to various scenarios. I scored miserably, confirming the research and joining the ranks of the overconfident. http://tim-richardson.net/misc/estimation_quiz.html
Technicals, Momentum and Basketball
Yesterday’s decline took us down through prior support levels that had held ground on several occasions during the last month or so. In essence, we had been trading in a band with 1000 on the S&P 500 as the upside and the 2001 lows of 820 on the downside. In technical jargon, when the markets break through […]
Michael Lewis, Historic Bear Markets, and Recent Fund Flows
Michael Lewis, former Salomon Brothers bond trader turned famous author (Liar’s Poker, Moneyball), published a new article on the collapse of Wall Street investment banks about a week ago. The title of the article is “The End”. It doesn’t paint a very good picture of Wall Street, to say the least. If you can stomach some […]
Time To Consider a Roth IRA Conversion?
If you have earned less than $100k in adjusted (combined if married) gross income this year and have an individual retirement account, you may want to consider converting it to a Roth IRA before year end, potentially saving considerable tax dollars down the road. Here is how it works. When converting an IRA to a Roth IRA, the […]
Random Thoughts
We continue to receive favorable comments and thoughts on our blog postings. If you’ve found them to be of interest to you personally, feel free to share them with a friend or have them sign up to receive the posts directly at blog.broadleafpartners.com. We are also pleased to report that another new client account funded […]
Unemployment, The Consumer, and the Faith of Ancients
The market has pulled back in recent days, retesting previous lows. The primary reason for the decline may likely include the worsening outlook for the US auto industry and the delay in the Treasury department’s program to guarantee money market deposits. Unemployment has now increased to 6.5% from a low of 4.8% back in February, with most […]
China Joins the Bailout Crowd, Energy and Materials Stocks Rally
This morning brought news that China will be injecting $600 billion into their economy to stimulate growth and hopefully avoid a severe slowdown there and abroad. This stimulus amounts to roughly 16% of the country’s output last year, according to today’s Wall Street Journal. While China’s growth is still expected to be strong relative to the […]
Recent Thinking
We’ve been relatively quiet on the blog front over the last week. The good news is that we received funding for a new foundation account and have been busy picking our spots and getting it invested. (It’s a great time to buy, incidentally, if you can afford a long term perspective.) The bad news is that the last […]
Valuations at Extremes
I am a big believer in the view that valuations are rarely a useful tool for investors except in those cases when they reach extremes. I think we are in one of these cases today.As you may recall, many technology stocks were highly valued for a period of quarters and even years during the late 90’s, […]
Finish the Race
The markets plunged yesterday, retesting the lows hit a couple of weeks ago. Retests are typical in bear markets, but this one came quicker than might have been expected. Over the last few days the guests on CNBC’s early morning show, Squawk Box, have also become more bearish. The reason is logical. The bears have made a great call […]
Joke
From an unnamed British trader: “This is worse than a divorce. I’ve lost half my net worth and I still have a wife.”
Market Retests Prior Lows
The stock market is selling off aggressively today, retesting the lows hit in the last two weeks. Earnings season is well underway and while guidance is universally cautious, companies that have strong balance sheets are reacting far better than those that don’t. Apple and Broadcom, for instance, are both up nicely today. In spite of guiding results more cautiously, […]
Buffetology
From a friend in the business: The ratio of stock market value to U.S. GDP has fallen to 78%. This is based on the latest estimate for GDP at $14.3 trillion and U.S. market cap of about $11.2 trillion. The reason this number is significant is from a 2002 article that Warren Buffet wrote for […]
Saturday Night Live, Late Thursdays
The markets didn’t finish up on the day, but did stage a massive late day rally, closing well off their lows.For those who could use a good laugh (and who couldn’t!), check out Thursday’s video from Saturday Night Live. For those who want to learn more on what ails the financial markets, be sure to check the video […]
True Value
Over the summer, the price of oil spiked to $145 per barrel. Many folks said that the move from $90 to $145 at the time was based on the strong fundamentals of emerging market demand. As our readers know, we believed the spike had more to do with “fund flows gone wild” or the desire […]
FDR’s First Inaugural Speech, March 4, 1933
Excerpts of this speech from FDR came across my desk this afternoon. Some of the points echo comments we made in yesterday’s Economic Update and are in many ways exactly what the nation needs to hear from its future leader. As the political blame game rises to a deafening crescendo, it is easy to lose sight of […]
Weighing In
We’ve been a bit quiet over the past few days, but in no way have we been sitting still. We’ve been very busy writing and calling our clients, trying to shed some light on what we’re going through right now, our interpretation of the events given our experience in the industry, and our game plan for […]
Dr. Seuss
I usually read a book or two to Johnny — my five year old — before bed every night. This page from Dr. Seuss captured the events of last week perfectly. So much so, that I had to share. Here’s to better weeks ahead, little Johnny!
Quote of the Day, Franklin D Roosevelt, March 12th, 1933
“We have had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people’s funds. They had used the money entrusted to them in speculations and unwise loans. This was, of course, not true in the vast majority of our banks, but it was true […]
My Bailout Plan
Here’s my idea for a bailout plan. We all know that the banks need liquidity.We also all know that there is a huge surplus of assets in many contribution based retirement plans and in particular, IRA and IRA rollover accounts.At this time, an individual can use assets in a 401k plan to make a down […]
Quote of the Day, WSJ 9/25/08
Mr. Buffett received a call at 4:30 p.m. that Saturday from a private investment firm trying to assemble a group to buy the embattled financial giant. “I’m calling about Bear Stearns,'” the private investor began, according to Mr. Buffett. “Should I go on?'” Mr. Buffett recalls thinking: “It’s like a woman taking off half her […]
Ask Not What Your Country Can Do For You…
For several days now, I’ve been waiting for one of our country’s leaders to stand up and speak President Kennedy’s famous words, “Ask not what your country can do for you, but what you can do for your country.” In fact, I had included that comment in our last economic update but took it out at […]
Current Thoughts
It still boggles my mind that the markets actually closed up last week. Including yesterday, the markets have had moves either to the upside or downside of at least 2% for six straight days. (rounded) So far today, we’ve been in a much less volatile trading range, likely because all eyes are focused on the […]
Never A Day Like This
I don’t think I have ever quite experienced a trading day like this. Things were just awful for most of the day and the financial index was down as much as 5% at the worst point and is now up nearly 9%.Around 1pm, Great Britain announced that they would abolish short selling in financial stocks to […]
In Memoriam of Sir John Marks Templeton
CFA Magazine reminded me today of Sir John Templeton’s death in July at the ripe age of 95. As many may know, John was a legend and pioneer in the field of international investments. He was also knighted in part for creating one of the world’s richest rewards, the $1 million Templeton Prize which “honors […]
Economic Update Haiku
The Market’s GoofyDown Four Percent, Disney Up Thank God for Mickey
What Happened Today
As everyone knows, the markets got killed today. Each of the primary market indices were down over four percent, with financials leading the way on news that Lehman Brothers declared bankruptcy and Merrill Lynch would be acquired by Bank of America. Today’s decline in the S&P 500 was the worst in apparently six years according […]
Remembering 9/11
We published this entry about this time last year after hearing a speech from 9/11 survivor George Sleigh. We’ve decided to republish it today in memory of all those affected by the tragedy. May God bless you and comfort you.********************
Pepper & Salt, WSJ 9/10/08, and other Market News
In other news, Lehman is all the talk this morning on CNBC. I won’t go into the details, but suffice it to say, the financial markets will continue to have their share of troubles. Buffet apparently told his underwriting company to no longer insure bank deposits above the $100k level provided by FDIC insurance. This […]
Buy the Bleeding: Time to Revisit Energy and Industrials?
Yesterday’s announcement of the takeover of Fannie and Freddie provided a brief respite for the markets, with the financial sector surging and taking the S&P 500 up a couple of percent. Today, the action is a tad different, with all areas of the market down with the exception of slight gains in consumer staples and […]
The Real Cost of Rewarding Failure
While the move by the Treasury Department on Fannie and Freddie was necessary, it isn’t without its costs. As I look at the stocks that are up today and compare them to those that are down, I see an eerie parallel that reminds me of words I shared in our most popular blog entry to […]
Fannie & Freddie News
This weekend, the treasury department stepped in and put Fannie and Freddie into receivership, effectively nationalizing both distressed mortgage companies. In Friday’s update, Uncertainty and the Birth of Black Swans, we mentioned that with oil prices finally declining, mortgage rates might finally be able to follow the Fed’s rate cuts, stimulating the economy as they […]
Uncertainty and the Birth of Black Swans
The stock market has been weak all week. Many indices fell by over three percent yesterday and the carnage continues today. The perception of lower oil prices being a good thing has, at least in the short run, morphed itself into a negative interpretation, namely that a global recession and perhaps even depression are at hand. Fear’s pendulum has […]
Mr. Roger’s Neighborhood
While I have generally been a life-long conservative, I do not and have not always voted strictly along party lines. This may come as a surprise to some readers of our blog and I am perfectly okay with that. Today, a friend on Facebook forwarded a video of Mr. Roger’s testimony to Congress in 1969, […]
Gustav Fades, Oil Plunges
The big news of the day is oil’s big decline — likely a result of Gustav’s failure to bring the level of destruction originally feared in our country’s largest concentration of refinery capacity. While oil has recovered somewhat off its intra day lows, the price is still down 5% today, just below $110 per barrel. The markets initially opened up […]
Quote of the Day
Peggy Noonan, in her coverage of the Democratic Convention in the Wall Street Journal this morning, said that the best line so far came from our state’s governor, Ted Strickland. Echoing the 1988 Democratic convention joke about George H.W. Bush — that he was born on third and thought he hit a triple — Strickland said of George […]
Slow Days, Olympic Sized Hangovers, and Russia
The bad news is that the markets were pretty ugly yesterday. The good news is that volumes were relatively light and will likely remain so as we head into a holiday shortened week. When big moves to either the upside or downside are not accompanied by higher trading volumes, they tend to lack significant informational value. After […]
Quotes and Thoughts from Warren Buffett on CNBC This Morning
Warren Buffett is on CNBC this morning. He is always good for a quote or two. He’s still on, if you are near a TV and can tune in.******** “The only way to vote for someone who agrees with you on all the issues is to run yourself and I’m not going to do that.” (On his support for Obama even though […]
Guest Blogger
Today’s entry is actually a link to my pastor’s blog, Joe Coffey of Hudson Community Chapel. Joe has been given the gift of communication and has proven to be a good steward of that gift time and time again. Today, he reminds me that Time is Sneaky. Next week, another summer will draw to a close and my […]
Classic Ronald Reagan Quotes
“I’ve laid down the law, though, to everyone from now on about anything that happens: no matter what time it is, wake me, even if it’s in the middle of a Cabinet meeting.” “The most terrifying words in the English language are: I’m from the government and I’m here to help.” “Of the four wars […]
Finding Michael Phelps
We have posted a new Economic Update, Finding Michael Phelps, on our website. While it generally follows the through process of today’s earlier posting, we made some additional comments as well. Interested blog readers may wish to take a look.
Short Sale Rules Expire, Financials get Hit; CNBC on Monday
Yesterday, financial stocks were hit pretty hard. While a couple of high profile and perhaps well timed analyst downgrades of Goldman Sachs and the announcement of first time loan losses from JP Morgan didn’t help matters, it is perhaps more interesting to note that the sell off coincided with the expiration of emergency SEC rules banning short […]
Earnings, Oil and Simple Pleasures
Earnings reports are quite thankfully winding down. Roughly 90% of the S&P 500 member companies have announced results, with a minor few remaining. In general, earnings weakness was once again underestimated by Wall Street analysts, with aggregate growth in Q2 actually down 22% year over year, considerably higher than the 13% decline in earnings expected at the […]
Oil, Smart Cars, and DaVinci Surgery Video
Oil continues to ease back slightly today, to about $118.50. While we didn’t comment on it, yesterday was a very nice move for the markets. Monday’s decline in oil left us a bit perplexed as to why consumer discretionary stocks in particular didn’t react more positively. Tuesday’s move suggests there was just a delayed reaction. Sometimes the […]
Quote of the Day
“We love that Obama is able to flip-flop…We think it’s one of his most redeeming qualities.” Art Laffer & Associates Economic Update, 8/5/08.
Commodities get Pounded
Commodity and energy related stocks are getting pounded today. We’ve been writing that the up move in commodities this year is reminiscent of a bubble, not-sustainable, and likely to end badly. Today’s swift downward move is almost panicked in nature, with many stocks falling 5-10% to their recent 200 day moving averages. Oil is hovering at […]
Broadleaf Partners’ Economic Update: Oil, Earnings and When to Sell
In today’s economic update, Oil, Earnings and When to Sell, we provide our current thoughts on the recent pullback in oil, the reaction of stock prices to this quarter’s earnings reports, and the difficult decision on when it may be the right time to sell a common stock. If you would like to receive our […]
Strange Lions Filmed on Safarai
This video has nothing to do with the economy or the markets. But you have to admit, it’s alot funnier than most blog entries. Love the deer that stands up in the middle and the three monkeys in the background.
Lawyers and Paper
According to a study done by Conservatree, Arnold & Palmer and Purdue University and as reported in yesterday’s Cleveland Plain Dealer, an average lawyer can use up to 100,000 sheets of paper every year. That’s enough to: Make up 12 forty-foot trees. Line Interstate 90 from Dead Man’s Curve to Lake County Balance the scales of justice with […]
Rays of Sunshine?
A stronger durable goods order number this morning and an uptick in consumer confidence suggest that second quarter GDP may be as high as 2-2.5%, a considerable distance from recessionary levels. While the tax rebates have likely helped this quarter, it would still be an excellent showing, particularly considering all the negative news of late. Keep in mind that Q4/Q1 GDP […]
Connie Schultz vs Yours Truly
Over the past few days, the Cleveland Plain Dealer’s Connie Schultz has spoken harshly of the restaurant industrys’ apparent practice of deducting a portion of the credit card transaction processing fee for customer bills from a server’s tips. When I read the first article a few nights ago, it struck me as being a bit heavy handed and […]
Thoughts on Earnings Season
Earnings season is upon us. It is always one of the more stressful periods of time in the business. Not because we don’t have a good feel for how our companies are likely to do, but because we don’t know what the stock market’s response to such news will likely be. There seems to be two […]
The Coincidence of sub $130 oil
I find it interesting to note that when regulators decided to abolish the naked short selling rules two days ago on financials these stocks started to tear upwards while at the same time the price of oil began to crack. Oil is falling once again today to below $130 per barrel. Coincidence? I really wonder.For all the talk of supply […]
Oil, Inflation and Wells Fargo
The markets are enjoying a solid rally today, with the S&P 500 and Russell 1000 Growth indices both up more than 1%. Of course, given the volatility of late, this could all change in a matter of seconds or by the time I finish this blog entry.Nevertheless, a couple of things, stick out in today’s rally. […]
Ugly Days, Springboards, and Silver Linings
On July 9th, the S&P 500 declined into official bear market territory, falling by twenty percent from the prior highs achieved in October of 2007. Make no mistake about it, these have been ugly days, perhaps far uglier than even the indices suggest. According to work done by JP Morgan, of the 723 U.S. stocks that have a trading history going back […]
Making the Trade, Cooperstown and Broken Foots
The Indians lost their star pitcher, 2007 Cy Young winner CC Sabathia, trading him for four minor league ball players. While this move was widely anticipated over much of the past year, the drama has finally drawn to a close. The Indians knew his contract was coming due and that keeping him on the team would be a […]
All Hail the Vespa
The market was trounced today and the action was odd. The S&P 500, oil and Research in Motion dominated the headlines as anxiety levels were heightened by price levels that flirted with recent support and resistance levels. (That’s alotta levels, I know.)Shortly after the market closed, a hailstorm rained down on Hudson, Ohio and my five year […]
American Baseball, American Oil
American Baseball. On Friday, my family and I will be heading to Cooperstown, New York, where my twelve year old son Pete and the Hudson Hurricanes will spend the week playing baseball with some 150 other teams from around the country. Baseball is a sport I have come to love, not necessarily for the game itself, but because it has offered […]
Personal Reflections on Health Insurance
Since starting Broadleaf Partners three years ago, I have purchased a high-deductible health insurance plan that covers my family of five. My premiums have been running roughly $400 per month, but I also have to cover the first $5,000 in health related expenditures I have each year. To that end, I have established a tax […]
The World’s Greatest Athlete
Perhaps because of Tiger’s outstanding victory under pain earlier in the week, both the Wall Street Journal and the New York Times have published fascinating articles in recent days on who might be considered the World’s Greatest Athlete. According to the Wall Street Journal’s hired sports experts, #1 would be Roman Sebrle, a Czech decathlete, followed […]
Time to Buy Financials?
Normally, I don’t post more than three or four entries per week and almost never post more than a single entry per day. I also usually like to focus on a single subject of conversation in most of our blog entries. Over the last few days, however, I’ve noticed that the S&P 500 has woefully underperformed […]
Fulcrums and Flashpoints
To a great extent, the market’s balance in the shorter term rests on a fulcrum represented by the price of a barrel of oil. If oil prices break out yet again to the upside, it becomes very difficult to envision any area of the stock market doing well, even energy itself. Readers may recall that […]
Classic Rock and The Economy
If you’re a middle aged credit manager working for Home Depot, what might be your next career? How about touring as the new lead singer of classic rock group Boston? While it may seem a bit far-fetched, that’s exactly what happened to 43 year old Tommy DeCarlo when members of Boston saw his YouTube video clip. In fact, don’t laugh, […]
Full Counts and Double Plays
Yesterday was a tough day for the markets. As the S&P 500 slipped below recent technical support levels, stocks accelerated to the downside as higher oil and commodity prices gave rise to talk that the Fed may need to start raising rates sooner rather than later. Yesterday, the S&P 500 had only 45 advancers, of which 27 or 60%, were […]
Falling from Grace, Job Loss, and War
Over the last few days, a number of thought provoking datapoints came across my desk. I thought I’d share, for what it’s worth.Financials’ Fall from Grace. Consistent with the behavior of other sectors suffering from a bubble based implosion, financials have fallen from grace. A few weeks ago, the sector had the largest representation within the […]
Oil and Unemployment
Oil is surging $6 this morning after another strong run yesterday. It is hard to say why it is moving up again after falling back off its highs over the last couple weeks, but again, it isn’t unusual. If I had to guess, the higher unemployment rate announced today, 5.5%, may be fueling the notion that growth is […]
Dollar Comments, the End of a Speculative Trade, and Ties in the Workplace
Yesterday, Bernanke mentioned the dollar in the context of a discussion on inflationary pressures. Historically, he hasn’t said much about the dollar so these comments are being met with great interest on the street. Mike Rothman, an influential oil analyst at ISI Group we know, has pointed out several times in recent months that the correlation […]
CNBC Appearance: The Commodities Debate
A blog entry we posted last week caught the eyes of CNBC’s producers and they asked us to appear in a debate regarding the direction of commodity prices this morning, June 3rd. If you missed the interview, you should be able to view it here. In preparing for such appearances, I always like to […]
Where There is Smoke…
The biggest news of the day or perhaps yesterday, was that the CFTC will begin taking a closer look at the commodity exchanges to see if there have been any improprieties behind the massive increases in the price of oil and until more recently many other commodities.For once, I think our regulators may be doing […]
Fund Flows Gone Wild, Consumer Confidence and Baseball
We haven’t written in about a week. Things have been pretty busy here as we gear up our marketing efforts ahead of the third year anniversary of our investment track record this summer. For the last three years our primary goal has been generating strong performance results for our growth equity portfolio. As we approach our three year […]
A Shocking Observation
A trader in the business just passed along the following observation from another buysider in the business.When the government passed the economic stimulus act a couple of months ago, oil was at $93 per barrell. Well today, as the checks go out, it’s at $132. That’s a 42% increase.Amazing. It takes me back to my […]
Taking A Breather
The market has been very strong for most of the second quarter, nearly erasing its first quarter losses. The S&P 500, NASDAQ and Dow have all approached their 200 day moving averages in recent days and now, perhaps with earnings season officially in the rear view mirror, are taking a breather. T Boone Pickens’ statement this morning that oil […]
Bubbles, Barron’s & Broadleaf
The study of investment bubbles is getting alot of press these days, so much so that today’s Wall Street Journal discusses how the subject has become a hot topic among young academics. My experience with bubbles has been less academic and more real. In August of 2000, Barron’s wrote a cover story on the strong performance of a technology […]
The Politics of Inflation & Work at Home Fridays
The CPI came out tamer than most had expected both at the core and non-core levels. The core CPI was up .2% month to month compared to expectations of .3% rise. Excluding food and energy, it was up .1% versus expectations of a .2% rise. The consumer discretionary sector is responding to this news in a […]
High Flyers, Washed Outs, and Have Beens
For those that missed it, here are some of the written thoughts we prepared in advance of this morning’s CNBC appearance, some of which we shared during the interview. (Readers may may need a CNBC.com password to watch the replay, available on this link.) *****I would put my current thoughts into three primary buckets. These include The High Flyers, The Washed Outs and […]
Guitar Hero Rocks On
Activision just crushed earnings estimates on the strength of huge revenues from their Guitar Hero and Call of Duty video game franchises. It wasn’t just a small beat, but a huge one and after Christmas at that. Revenues were almost twice expectations at $603 million while earnings were nearly triple the estimates. Apparently, fans of […]
How I Spent My Stimulus
In general, the retail same store sales figures that came out this morning were a tad better than most people had expected. While few folks have received their government rebate checks, perhaps simply knowing that they are on their way gave some shoppers the encouragement to spend in advance. Shocking! On the lighter side, if you are curious […]
Muddling on Through & The Lone Wolf
The ISM Services Index, a measure of economic activity, came out yesterday at 52 compared to the market’s expectation of 49. In general, a number above 50 indicates an expanding economy and a number below that, a contracting one. This economic data point is mildly encouraging, suggesting along with other economic indicators, a reduced risk of recession.On the earnings […]
Over the River and Through the Woods
Non-farm payrolls declined only 20k in April versus expectations for about 75k, and the unemployment rate ticked DOWN to 5.0% versus expectations of an up tick to 5.3%. Needless to say, this news is causing the futures to spike aggressively upward this morning and may be responsible for a breakout from the 1400 level that […]
Exxon, Energy and the Market
Exxon reported earnings that missed expectations due to cost pressures that hurt their refining margins. I don’t know if their earnings are responsible, but the energy and materials sectors are both under extreme selling pressure today while almost every other sector is extremely strong. In my opinion, their report may not be indicative of the energy […]
Why I Hate the Consumer Confidence Survey
There has been a great deal of talk about consumer confidence plunging to 26 year lows given rising oil and falling house prices. When I attended the University of Dayton’s RISE Symposium in late March, students were asked what their favorite economic indicators were. One said the consumer confidence index and I remember muttering to myself that […]
Storms, Steroids and Sunnier Skies
The Fed will meet next week to discuss their next move with interest rates and most believe it will be their final adjustment downward, by 25 basis points. In reaction to the expectation, the dollar firmed yesterday and with it, many commodities and commodity oriented stocks came under pressure. Many distressed areas of the market, […]
Inflation, 1980’s Style
A long time friend in the business passed along the following link to a Time Magazine article written in April of 1980. The article provides some perspective on inflationary troubles at the time that make today’s concerns pale in comparison. While there are some remarkable parallels between now and then (a highly contested Democratic primary between Carter and Kennedy […]
General Observations
So far, for an economy flirting with recession, earnings results have been surprisingly good. The technology, energy and industrial sectors have generally been sources of strength, while write downs have continued to hurt the beleaguered financial sector. What is even more surprising is that the stock market has enjoyed a nice rally off its lows in spite of […]
A Future Analyst?
Pepper & Salt, WSJ 4/18/08.
A Little GOOG ‘ill Do Ya GOOD
Well, the big news of the day is Google, if you hadn’t heard, up 17% on last night’s earnings news which assured investors that weaker paid click survey statistics from the past few months were not indicative of the company’s underlying business strength. I guess we can trust the judgment of the company’s founders when, during last […]
Intel and Inflation
The stock market is doing quite nicely today with the S&P and Dow both up about 1.4% and the NASDAQ Composite up over 2%. Intel’s better than expected earnings and decent guidance for the PC market are likely stoking the market’s gains. This news is in contrast to GE’s disappointment last week and once again may suggest […]
Earnings in Earnest and Taxes they Taketh
While there were a few earnings reports last week, the numbers should start flowing in earnest this week with companies like IBM, Google, Harley Davidson, Schwab and Schlumberger all scheduled to give us some insight into how the credit crunch and economic slowdown may or may not have affected them this quarter. Of course, there is always […]
Bringing Good Things to Light
The news of the morning is General Electric. The company’s earnings came out and missed expectations by about 7 cents on the bottom line and a billion or so on the top line. General Electric in many respects is like the S&P 500 itself given their large portfolio of companies from a broad spectrum of industries. The […]
Venturing Out
The weather has ruffled the feathers and excited the senses of all who live, eat and breathe in Northeast, Ohio –both man and animal alike. We’re starting to venture out from our winter nests up here, taking walks in the park, riding our bikes, and gassing up the Harley for the first time. Parking spots in the […]
April Fool’s?
The markets are starting the second quarter off with a bang, with most indices soaring upwards just shy of 3%. This morning, UBS announced further write offs totaling $19 billion, which is apparently some pretty good news or enough at least, to rally their stock 14% and power the rest of the markets higher. While today’s […]
RISE VIII meets Rocky IV
As discussed in our last entry, Jeff and I attended the 8th annual RISE Investment Symposium put on by the University of Dayton last week. The event has grown immensely over the last eight years, drawing over 2700 attendees from 257 colleges and 68 different countries this year. Last week’s participants closed the NASDAQ stock market on Thursday and also […]
Our Thoughts Exactly…
We have mentioned several times in recent posts about our belief that the latest rise in oil and other commodities appears to be speculative due in large part to the lack of participation in the underlying stocks. An article from Barron’s over the weekend lays out possible explanations for this disconnect and can be viewed here with a subscription. The article suggests that the heart […]
The University of Dayton’s RISE Symposium
Jeff and I will be traveling to Dayton later this week to attend and present at the University of Dayton’s RISE Symposium. This now global event was started over eight years ago as a forum for students at a few colleges to compete in an annual portfolio competition and to gather and discuss investment strategy with one another. […]
Bear Stearns — Arisen?
The markets are enjoying another strong rally today, driven by a possible floor in housing sales and rumors that the Fed may start to purchase poorly performing mortgage loans rather than simply accept them on REPO. But the biggest news today, following Easter Sunday, may be Bear Stearns, whose stock price has arisen from the ashes on […]
Commodities Update and News You Can Use
Commodities, including oil, gold and the agricultural variety, have been under pressure over the last couple days. It is, of course, anyone’s guess as to why they’ve finally pulled back, but there is no doubt that it has been swift. As we’ve written in previous updates, we believe in the long term case for commodities given the […]
The Sacrifice of Bear Stearns
I know alot of great folks at Bear Stearns. The analysts, salesmen, and strategists at the firm — now a chapter in history — have always provided great research insights, excellent execution of trades, and outstanding customer service. Joe Baudo, a young salesman I know at the firm, has always provided us everything we asked for, volunteering to get […]
What’s An Investor to Do?
The markets were all set to open on a strong note this morning following the release of more favorable short term inflation data, but quickly plunged almost 3% following news that Bear Stearns is at risk of going out of business. At this time, Bear Stearn’s stock is down 42%. The markets have recovered somewhat […]
Thinking More About Offense
The action of the markets in the last week, particularly the internals as measured by industry, subsector industry performance and economic data releases, suggest that the greatest risks to the stock market may continue to be whether or not we are, in fact, in a recession. For awhile now, we’ve been of the belief that we’re not […]
Moving to Hyperdrive
The Federal Reserve Board made a stunning and welcome announcement this morning, reversing yesterday’s sickly display put on by the markets. In effect, the Fed announced that they would lend up to $200 billion in treasury securities through its primary dealers, enabling banks and other participants to find short term liquidity for their relatively illiquid mortgage back securities. The news […]
No Place to Hide
No place to hide. That’s about all I can think right now. Materials related stocks are getting it on the chin today and are down as a group by nearly 5%. With the exception of oil which is hitting $107 per barrel, it’s pretty ugly out there. Even the defensive health care sector is down today, declining about 1.5%, […]
For What It’s Worth, An Important Turning Point?
The intra day swings in the market continue to be swift and severe. So much so, that it’s much easier on the mind to just turn off one’s machine and focus on other more pressing matters, like why my electric bill keeps going up every month. But for what it’s worth, most of the […]
Texas Versus Ohio: Basic Economics
There is an excellent editorial in today’s WSJ comparing the economies of Ohio and Texas as both Hillary and Obama zero in on tomorrow’s key primary votes. In contrast to Texas which is creating plenty of jobs for its residents, Ohio is losing them and ranks as the 47th worst state in the nation in terms of […]
Pigs, Hogs and Nasdaq 5000
Today’s Wall Street Journal has an article titled Commodity Prices Surge, as Investors Seek A Haven. Several points of view from this article echo comments we made in our Economic Update last Friday titled Commodities, Oil and the Reflation Trade. A fundamental case can certainly be made for a long term, secular bull market in commodities driven by the rise […]
Words Worth Sharing
Following up on Jeff’s entry from yesterday, we found the following words from a report issued by Merrill Lynch today to be in line with our current thinking on the homebuilders. We’ve often compared the performance of the group to the NASDAQ crash and since Rosie’s comments do such a good job, we’re not going to […]
When Bad News is Good News
It’s been a slower week for data but one thing did strike us as interesting over the past few days — stocks reacting positively to presumably bad news as we saw with retailers Home Depot and Lowe’s. Both stocks reported weak earnings relative to expectations and guided lower for 2008 but both saw their stocks […]
Commodities, Oil and the Reflation Trade
Throughout the day yesterday commodity prices soared as did the stocks of many companies who track in such goods, including the materials and energy sectors. Later in the day, the rest of the market fell apart as the heat from these two sectors alone deprived all others of their necessary oxygen. Technology names in particular took it […]
Banking, Fidel Castro, and the Eighth Grade
The well publicized problems in financial land may be seeping into newer areas according to today’s Wall Street Journal. Lehman Brothers may have to write down some loans associated with commercial real estate and an obscure area of the credit markets known as auction rate preferred’s is dramatically affecting the daily borrowing costs of several municipalities […]
Laughing out Loud (LOL)
Today’s economic news continued on the negative side, with the New York State Empire Index of manufacturing activity and the Michigan Consumer Sentiment Survey both signaling a weak economy. While both of these measures can be notoriously volatile and have rarely proven predictive (especially the sentiment survey), they do at least for the moment paint a more bearish picture. Setting all of […]
Growth on the Rails – Really!
During the summer of 2006, I reluctantly attended a lunch in Cleveland with the CFO of major U.S. railroad operator Burlington Northern Santa Fe. Historically, railroads had been left out of discussions pertaining to growth stocks but that meeting went a long way towards changing my opinion. There is a great article in today’s Wall […]
Quote of the Day
“I don’t want to lend money to someone who needs to come to me to borrow it.” — Diary of an Unknown Banker, 2/11/08.Isn’t it amazing how fast sentiment changes? Almost one year ago, banks were jumping over themselves hand and fist to meet the insatiable demand for funds from the private equity and hedge fund communities. Now, they only want to […]
Wow, Bear Markets, and the Craziness of Datapoint Trading
In bear markets — and I’m willing to call this a bear market given that many indices are close to 20% from their highs — the swings in stock prices become emotionally charged. Yesterday, the stock of the Chicago Mercantile Exchange (CME) had a massive downdraft of about 18%. The downdraft had nothing to do with the […]
The ISM, Super Tuesday, Pro Choice and Cisco. Buy Growth Now.
The new non-manufacturing ISM survey was released a bit earlier than expected today, indicating that services activities were at their lowest levels since the datapoint was first released. I really don’t think this is new news. We know that the economy is slowing. The market, however, hasn’t responded very nicely to the release this morning. Why […]
The Legend of January
The performance of the markets this January has been among the worst on record. Almost everything has been down sharply, with the exception of the beaten down homebuilding and financial services sectors which actually posted nice gains. While we’re warming up to the financial sector given easing monetary conditions, the upward move has likely been exacerbated by short covering […]
Durable Goods, Earnings & The Fed
Durable goods orders surged 5.2% in December. While this economic release is notoriously volatile on a month to month basis, the magnitude of the current results supports the view that the recession in the housing and financial services industries hasn’t spread to the economy at large. We are also entering the thick of earnings season, with this […]
Breaking A Fever
The markets rallied an amazing 4.9% off their intra day lows yesterday to close up on the day. The action was so intense, that my wife Lisa got in on the commentary, sending me the following words of wisdom after the close. capitulation– C-A-P-I-T-U-L-A-T-I-O-N I believe there has been capitulation in the market. CapitulationIt also turns […]
The Day After
Everyone knows by now that the Fed lowered rates in a surprise cut yesterday of 75 basis points before the markets opened. This is certainly a good start and shows that the Fed isn’t asleep at the wheel, which was the impression they gave at last week’s Congressional testimony. The markets have declined steeply from their […]
Congresswoman mistakes Bernanke for Paulson
Thanks to our friend Jason Trennert, Chief Investment Strategist and CEO at Strategas Research Partners, for passing along this You Tube clip of Marcy Kaptur, Congresswoman from our beloved Ohio, in yesterday’s Congressional testimony. I hadn’t seen or heard about this clip when I posted yesterday’s entry, Blah, Blah, Blah, but suffice it to say, I think […]
Blah Blah Blah
Bernanke’s testimony to Congress this morning, and in fact most testimonies to Congress, often have the quality of an old fashioned sideshow act at the circus. Come see the world’s fattest woman! Feast your eyes on the man with four arms as he wrestles a tiger with no tongue! Watch the Fed Chairman as he drones on about softening in […]
Crazy Days
The intra day volatility in the markets continues on the extreme side. Near the end of the trading day, we’re roughly flat. At one point, the markets were down between one and two percent and up as much as a percent. These intra day swings feel orderly and not necessarily panicked. By this, I mean that specific stocks are […]
Ugly Ducklings and Beautiful Swans
The markets have played the role of ugly duckling so far in 2008. The Fed’s statement last week that they would take swift action to prevent further economic weakness suggests that the economy may be more fragile than they had previously expected. The Fed will likely cut by 50 basis points at their month end meeting, if not earlier. Earnings season starts […]
Bending without Breaking
This is our first entry in a little over a week. We’re usually pretty busy with quarter and year end reporting activities, but a travel commitment late last week made things a bit tighter than usual. As the dust begins to settle, we’ll certainly be back on schedule, blogging on a more regular basis. If you missed the 2007 performance […]
Thanks and Happy New Year
Jeff and I want to wish all of you a healthy and prosperous New Year. We ventured into the world of blogging in 2007 and will be looking for ways to improve our content and make it more useful to you, our readers, as we move into 2008. To that end, if there are any topics or questions […]
Over the Hill
I thought our readers would like to know that Doug is out of the office today “celebrating” his 40th birthday. How’s that for a Christmas present? I think I’d rather get coal (especially given where coal stocks are trading these days).At first I didn’t think much of Doug getting older but as I look back on the […]
Less Was More in 2007
Each year at this time, Jeff and I review the trades we made in the portfolio during the year. While we know every idea won’t work out, we still want to know if we’d have been better off by setting the portfolio in place on January 1st, and then calling it a year. Did our actions help […]
Coal, The Day After
The top two performers in the portfolio today — the day after Christmas — were a coal mining company and a coal mining machinery company. Each gained more than 3%. Coal stocks have actually been stellar performers for a few months now, leading right up to Christmas. And while Wall Street would have you believe China and […]
Quiet
It will likely be a quiet day on Wall Street, as is usually the case. Other than some news from Target this morning, the headlines have been pretty quiet. Target indicated that its same store sales results for December would likely be between -1 and 1%, well below the 3-5% growth that they had forecasted earlier in the month. […]
Random Thoughts
Typically, we prefer addressing a single issue in our blog entries. But on some rare occasions, several thoughts cross our mind, and we’re not quite sure which idea deserves our focus. In today’s blog, we’ll switch gears, as we have done on occasion, and consider some of today’s random thoughts. Goldman Sachs. Goldman Sachs reported outstanding earnings yesterday. […]
A Reader Asks…
In response to today’s earlier post, Milk and Cookies, a reader asks…“Where do you look to buy if a recession is on the horizon? How do you protect yourself in a recession and still make some money versus hiding out in a money market fund?” Here were our thoughts, which he felt were worth sharing.It […]
Milk and Cookies
While the markets aren’t selling off too strongly today, the stocks of several recent leaders are. What is interesting to note is that the declines in these names aren’t related to any fundamental disappointments. Instead, they may reflect a resetting of expectations given rising recession concerns and a more measured Fed response given recent inflation data. As we said […]
Reading the Body Language
The producer and consumer price indices — both measures of inflation — were released over the last two days, showing greater pricing pressures than had been expected, both at the core and non-core levels. And yet, it is also clear that the housing and banking industries are in a crisis situation which is weighing on the credit markets […]
A Visit with Mark Shapiro, General Manager of the Cleveland Indians
Yesterday morning, I attended a breakfast with guest speaker Mark Shapiro, General Manager of the Cleveland Indians. While I’m no expert, I have learned a great deal more about the game through my twelve year old son, Pete. He became a fan at an early age, evident in a family video I have of him […]
Weather or Taxes?
We all know that birds, vacationers, retirees and the like all head south this time of year to escape the colder weather. More recently however, it seems the only ones returning once the sun comes out are the birds. The reason? Taxes and other economic variables that make the Northeast and Midwest states less desirable […]
Naughty and Nice
We’ve been busy checking our list once, checking it twice, trying to figure out which sectors have been naughty and which have been nice. And in spite of two continued lumps of coal in the housing and banking sectors, the news is actually quite encouraging. Several economic datapoints came out this morning which suggest that a recession, while still possible, isn’t […]
A Risky Time for Tax Increases
While we are bullish on the equity markets, particularly for growth investors, there are always risks. One of the primary risks for 2008 will likely be the Presidential election. Typically, it hasn’t mattered a whole lot to the markets which party is in power, as long as there is a balance of power. However, when the power base […]
A Reader Asks…
A Reader Asked“I would like your opinion re: the largest pension funds in the U.S. changing their asset allocation reducing their U.S. equities significantly. Are foreign and emerging markets going to reap thew benefits of this?”Our ResponseCalpers and several other large state institutions have been considering or are in the process of reducing their domestic […]
Monsters and Muck
The market is just on fire today. I can’t say that any one piece of news has sparked the rally, but it is a monster rally all the same. At this moment in time, the S&P 500 and Russell 1000 Growth indices are up 1.8% each and our portfolio is up 2.6%. Oil prices are falling a bit, […]
Abu Dhabi, Citigroup Convertibles, and Trotter Treadmills
The Abu Dhabi Investment Authority invested $7.5 billion of much needed capital into Citigroup through the purchase of convertible bonds today. The bonds must be converted to Citigroup equity at $32 to $37 per share starting in 2010. In the meantime, the Authority will also be paid a handsome 11% annual rate of interest. The timely infusion will help Citigroup shore up its capital base and likely […]
Stuffed
The last three months of each year follows the same pattern. Trick or Treat, Stuffed Turkey, and then Santa Claus. A crescendo of gluttony beckons and then drowns us in a boat of commercial gravy. Today’s Cleveland Plain Dealer was a brick of an edition, stuffed with no fewer than thirty retail circulars beckoning […]
Volatility Anyone
The market continues to vacillate significantly approaching the lows we saw in August as we head into this holiday weekend. For instance, our portfolio has been up as much as one and half percent today and down as much as half a percent. There is much to be wary of with the persistent credit problems, […]
Engines & Brakes
Earnings season is almost officially over, which is good news to our ears as it has been a tough one for stocks. Since peaking at the end of October, the S&P 500 and Russell 1000 Growth Indices have declined 7% while the NASDAQ Composite has fallen a more aggressive 10%. Why might this be the […]
Digging the Dollar (or Not)
Everyone loves to talk about the dollar these days. Even super models are in on the action. It’s THE thing to do. Mention the dollar at a cocktail party and people will gather around and bob their heads up and down at you as if they know what you’re talking about. Even though the dollar’s down, the chatter […]
Hammered
The markets are getting slammed again today and while all the indices are down like yesterday, some are more so than others. Technology, which has enjoyed a very strong run off the August lows is getting hit the hardest. The sector has been a strong leader off the August lows and has finally succumbed to selling pressures, […]
Random Musings
For what it’s worth My wife Lisa chimed in on yesterday’s blog entry. An employee at McDonald’s had just told her that gas would soon cost $4 per gallon. Actually, the employee isn’t that far off, if yesterday’s math applies. Gas prices at the pump, like energy stocks, haven’t moved up nearly as much as the price of oil has in recent […]
Clear as Mud
Over time, energy stocks tend to follow the price of oil quite closely. The price of oil has climbed from $20 a barrel five years ago to $97 a barrel today. Over the same time, one of the most popular Energy Exchange Traded Funds (XLE) has seen its price rise from roughly $20 per share to $77 per […]
La La Land
Large write offs at several high profile financial companies have weighed on the markets in recent days. These major financial blunders are a reminder that there are no free lunches. Unless you’re living in La La Land, someone always pays when a bubble bursts.A review of economic history shows that slowdowns and recessions are almost always accompanied […]
What’s Lurking Around that Corner?
At about this time last quarter, folks were completely obsessed with what the Fed’s next move would be. While folks certainly care this time around, the issue just doesn’t seem to engender the same sense of urgency or degree of attention. I’m not sure if this is because most feel that the first cut or change […]
Stress Test
Earlier this week, I had my first stress test. I’m not talking about the work, marriage, or children kind, but the good, old fashioned, “hop on a treadmill and stress your heart” kind. Oh, the joys of turning forty.Here’s what happened. A nurse taped a bunch of wires to my chest, put me on a treadmill and then steadily increased both the speed […]
A Commemorative Sell Off
The market is undergoing a healthy 2% sell-off today. In addition to a renewed plunge in short term treasury rates (likely related to a flight to quality following renewed credit concerns associated with several bank earnings results), higher energy prices and a few tepid earnings reports from some of the more economically sensitive companies likely have the markets thinking the “R” […]
Oil, Ken Burns, Putin, & Iran
Oil prices have spiked in recent days. Some are concerned that these higher oil prices will hurt the consumer. I’m not so sure I agree. Oil prices have been “higher” for quite some time now and the consumer has continued to spend. I think the bigger influence on consumer spending is unemployment. With the economy slowing down, […]
My Neighbor’s Candy
I read another surprising statistic yesterday, which was passed along by our salesman at ISI Group. According to Bloomberg, China has 106 billionaires this year, up from just 15 last year. A billion dollars is alot of money. But to have a six fold increase in billionaires in just one year strikes me as borderline crazy. On […]
Planting for a Bigger Harvest
Some interesting data came across my desk this morning, confirming what we’ve suspected in our blog musings and economic updates over the past few days and weeks. According to TrimTabs data released this morning, the average U.S. equity fund has slightly outperformed the average global equity fund so far in October. In addition, fund flows to […]
Trick or Treat!!!
By the time Halloween rolls around, we should be pretty well through earnings season. While I suspect we’ll have more treats than tricks, this time of the year is always just a little bit spooky. A few materials and energy related holdings have already reported earnings and they have generally been on the weaker side. […]
Up, Up and Away!
We own a company that reported solid results last night. The numbers were outstanding year over year, but generally inline with expectations. The stock is up 10% this morning. I only point this out because merely “in line” results — no matter how great year over year — would have certainly been met with an […]
Got Dividend? Make One!
Over the last few years, investors have been clamoring for more companies to start paying dividends. While I applaud these efforts, I also believe it has been motivated to some degree by the underperformance of many growth stocks over the last few years. With many growth stocks now coming back to life, I suspect that the calls for greater […]
Two Audits , Five Days, All Okay
We’ve been a little quieter this week than normal. And here’s why. Believe it or not, I was not only audited by the Internal Revenue Service for the first time last week, but also the Ohio Securities Division just five days later. Can you believe it? At least they didn’t decide to come on the same day! […]
A Question on Future Investment Bubbles, Answer Part II
Over the past few days, we’ve been addressing the following question posed to us by one of our blog’s readers. “We had the tech bubble – marked by people buying stocks that had no earnings. We had a housing bubble – marked by the subprime debacle. My question is where is the next bubble, how […]
A Question on Future Bubbles, Answer Part I
Yesterday, we had a reader ask us the following question, “We had the tech bubble – marked by people buying stocks that had no earnings. We had a housing bubble – marked by the subprime debacle. My question is where is the next bubble, how can I play it in the initial phase to benefit […]
A Question on Future Bubbles, But First an Answer on Human Nature
A reader of our blog asks, “We had the tech bubble – marked by people buying stocks that had no earnings. We had a housing bubble – marked by the subprime debacle. My question is where is the next bubble, how can I play it in the initial phase to benefit from its formation and […]
Lallapalooza!!! The Fed Cuts 50 in Unanimous Vote!
In a surprise move, the Fed cut the federal funds and discount rates by 50 basis points each this afternoon. I think most folks, including ourselves, were hoping for 25 basis points but fearful that they might actually do nothing. So, this is definitely a surprise in our books. The markets are clearly happy with the S&P at […]
Broadleaf Partner’s Economic Update Available: Looking Past the Fed and Towards 2008
Ironically, the markets have recovered a fair amount from their August lows, but few appear to be noticing, a situation we mentioned in our blog yesterday. When this happens, it is known as “climbing a wall of worry.” Indeed, the markets have climbed admirably in recent weeks in spite of predominantly soft economic data and […]
Feedback, Fadeaways, and Baby
Our last blog post, Remembering 9/11, really struck a nerve with our readers. George’s story moved us as well and we thank you for your feedback. The markets have been relatively uneventful today, fading into the close on light volumes. Everyone is so focused on the Fed’s decision next week that few have noticed the nice rebound we’ve […]
Jobs, Jobs, and Fewer Jobs
Friday’s weak employment report confirmed what the ADP and Challenger data earlier in the week had already shown. August payrolls fell for the first time in four years, with subsequent monthly revisions also weaker. Most had still expected moderating gains in the numbers, but not job losses. The data supports the view that the job […]
You Wanted to Know…
A few of you have sent us questions you hope to have answered on our new blog. And even more of you have asked for our opinions on individual stocks. Unfortunately, we can’t use the forum to discuss individual stocks as it would become a compliance nightmare. We do, however, welcome your questions related to the markets, […]
Job Gains Weakening, Growth Stock Outlook Improving
Challenger and Gray and ADP both issued reports on employment which showed slower gains in new payrolls than had generally been expected and the highest level of layoffs since February. While the ADP data has been subject to significant revisions in past months, the data nevertheless does confirm that the economic growth has been tapering. […]
Daddy Bernanke
The markets are in a joyful mood. They opened strongly on comments from President George Bush and have rallied further following remarks from Fed Chairman Ben Bernanke this morning. I found Bernanke’s speech particularly enlightening and for those so inclined, I’d recommend reading it. You can find it here. The easy reading version and play by […]
To Ease or Not to Ease
While the Fed may not ease on September 18th, more tame inflation data this morning added to the mounting pile of evidence that such a move is feasible. What would keep Bernanke on the sidelines? Stronger economic data — which we also received this morning in the form of above consensus personal income and spending […]
Shaking Trees
Sometimes the easiest way to pick apples is to shake the branches. I think that’s what’s happening in the market. There is very little volume on both the downside (yesterday) and the upside (today). We’re all over the place, but none of it means much. The short term investors are ripe for the pickin’. It’s odd, […]
Getting Ready for School
My kids set off for their first day of school tomorrow. Every year, I videotape them catching the bus. Have been for six years and figure I might as well keep it going. I’m thinking I’ll compile the videos and then give them as a present to their future spouses on their wedding day. Should be good […]
The Fed Can Ease
I’ll admit it. I’ve been skeptical about the prospects for a Fed ease at their September meeting. Not so much because I don’t think one would help the current credit crisis we’re in, but because the Fed members have been so laser focused on the inflation data. Their decision to cut the discount rate over a week ago instead […]
Welcome to the Broadleaf Partners Blog
Hello,Welcome to the Broadleaf Partners Blog page. We are currently working on getting the site up and running but please check back soon for discussion regarding the global economy and the stock markets.Kindest Regards,Jeff Travis