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Year End financial Review
05 January 2012

I've posted our year end Financial Review and Outlook contained in our Newsletter for January, 2012. The bumps experienced by many investors in 2011 were cushioned by our Balanced/Value style and most clients had what they have told me was a positive, satisfying experience. This, despite the highest volatility for equities since the dark days of 2008 and headlines suggesting impending doom for a heavily indebted US Federal government and a financially unstable Euro Zone.  We found plenty of opportunity in high yielding preferred, MLP's and Equities, while maintaining our strong allocation to high quality bonds with strong yields.

I invite you to go to the Newsletter link in the tan box to the right, and take a look at how we faired and what we see ahead.

 
An Uncertain Thanksgiving, Except for the Turkey
20 November 2011

 An Uncertain Thanksgiving,Except for the Turkey!

 Today’s headlines seem to explain why the financial markets appear to be confused and directionless with a downside bias. Nationally, Congress continues to fiddle while the national deficit spirals out of control. The Social Security Trust fund, invested entirely in US Treasury bonds, holds an investment nearly certain to be downgraded again, an instrument less creditworthy than bonds issued by Exxon Mobil, Johnson & Johnson or even by Finland!  In Sacramento, word is that sharply-reduced revenues to the state will mean more school closures, park closures, more tuition hikes and more layoffs. . Unemployment in the state is over 11%,yet, in the same day’s newspaper, it was announced that staffers for the California Senate will receive an average of a 7 percent across-the-board pay increase with some of them having job classifications changed to afford them a 25 percent pay increase

It is revealed that Presidential contender Newt Gingrich was essentially on the payroll of one of the most poorly run quasi-governmental agencies in American history “Fannie Mae”. Federal National Mortgage Corporation, as it is officially known, has proven to be one of the agencies that funded “ liar loans”, leading to a near collapse of the financial system in 2008.  To date, this shining example of crony capitalism has taken $112 BB in taxpayer bailouts and just last week came back for another $7.9BB.  Mr. Gingrich was earning $30,000 per month to help quiet opposition to FNMA’s profligate ways right up until they were put into conservancy in September 2008. The Republicans’ only other apparent choice for President, Mitt Romney is a man who oversaw the establishment of the first state run medical system in the United States, a concept that is anathema to conservatives.

Only last weekend, the CBS “60 Minutes” program revealed that members of Congress are not subject to rules preventing “insider trading”, that is, buying and selling stock and options using confidential or classified corporate information. Apparently Senators and Congressmen have used testimony, made in secret, to line their own pockets.  Insider trading is one of the most egregious felonies that a financial professional can engage in and many people have gone to jail for this! (Martha Steward was pursued for this practice, but pled to a lesser charge of perjury).

 
Occupy Wall Street -Legitimate Gripes or Self Delusion?
24 October 2011

Bloomberg today features an article by an Indian author who begins by wondering why protests against "The System" in developed nations has not found traction in places like China, India and other rapidly growing, aspirational nations. He cannot seem to deal with the fact that few people in these booming economies appear unhappy with capitalism. It finally has motivated me to comment on the "Occupy Wall Street" phenomenon, which I find rather annoying. The article in question demonstrates a strong desire to twist facts. The author suggests the lack of an "Occupy Wall Street" faction in financially expanding nations, ignores the plight of suffering masses. This suits his message supporting oppressed workers. The two groups are, in my view, entirely different. Sure, working conditions in the "Third World" are far from ideal as they once were in the United States,during it's heyday as a blue collar nation, growing rapidly, a century or more ago. Undoubtedly protests by workers have been brutally suppressed, particularly in China. Likely, these difficult conditions will be addressed by those societies with time. By contrast, in my perception, the "Occupy" people appear to be driven by an entitlement mentality unknown to a miner in India or a trucker in Brazil. Folks in the Third World are grateful for jobs, and too busy working to show up at protests.

 
Quarter End Report September 30, 2011
06 October 2011

First, as I write this, on my Macbook Air, the passing of Steve Jobs has just been announced. He represented much of what is great in America-the Henry Ford of his time, and I for one am grateful for his contribution to my life and business. The greatest asset our nation boasts is its human capital. I have every confidence that there are many other great innovators in our midst, who will offer those of us who are able to recognize that talent the opportunity to live better lives and profit thereby. May Steve’s family be comforted knowing they were loved by one of our national treasures.

The third Quarter, ended September 30,2011, saw continued pruning of client equity holdings that began in the previous quarter. Hesitation was not well rewarded in the market of the past 90 days. Although I turned a bit cautious in early August, the speed with which markets melted down during September was breathtaking, particularly for companies or funds tied to raw materials prices. The quarter just passed was the worst for equities since 2008.

 
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