The sky has not fallen, the earth still turns, the wolf is not at the door. So much hot air has been exhaled over fears of poor earnings this quarter that shutting up would positively contribute to mitigating climate change. Hyperbole aside, the economy is continuing to plug along nicely, and good businesses are finding ways to not only survive but thrive. It is still early in the earnings season, but a positive tone has been set.
There will be some companies that have run into difficulties; there always are. These may have particular challenges or are poorly managed. Sorting out this chaff is what capitalism and the investment process is all about. That is not to say there aren’t investment opportunities among these trailers. New managements, different strategies, alternative ownership, or simply time can sometimes make a big difference. Turnarounds, however, are difficult.
Trading volumes are still low. Money flows seem to be bouncing around without any consistency except one; money is flowing into European stocks. There is still a lot of money on the sidelines. Confidence builds slowly. However, without many attractive alternatives, investment in many companies is still very attractive. Income oriented portfolios can easily achieve dividend returns over 4% and have opportunity for capital growth. What’s not to like? Stay steady, my friends!
The Lonely Bull