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 In The Lonely Bull

How do you invest in a world rocked by macro events that threaten the business and economic environment? Recently it’s been not just one or two, but a series, if not a constant litany, of such possibilities. These have ranged from the possibility of war over nuclear arms with Iran, to an implosion of the European experiment, and a Chinese economic collapse based upon unsustainable internal debts and speculation. There are more out there and more to come.

Looking at history is a guide here, because macro crises are not new to investing. The twentieth century was one of the most violent on record. There were two major world wars, countless regional ones, civil strife in the form of suffrage, civil rights and labor issues just to name a few. Over the course of that difficult century U.S. stock values on average increased over 10%.

So, we are not suggesting that events that can rock the investing world should be ignored. Preventing big draw-downs in value is part of success in our business, but perspective does help. Focusing on what really drives stock values can help during these difficult and messy times.

Remember, it is earnings and the prospect for their growth that inevitably makes companies more valuable.

That is our focus and our belief that better earnings are on the way. Stay steady, my friends.

The Lonely Bull

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