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Market Review March 2012

March 24, 2012

In summary – markets have recovered to recent highs and a perennial question emerges: what to do now? We urge you to stay positive and buy high quality stocks.

One more time, the world did not end…

Last August, the market was down some 20% from its high. The media was full of reports of how Greece will take Europe down, then Europe will take the US down and the world just may come to an end. True, we have not yet solved all issues but one more time, the world has not come to an end. We will continue to worry about “peak oil”, the end of the world as seen by the Mayans and countless other issues. Yet, world economies are growing, with the US as its major engine of growth producing over 200,000 jobs per month. All this shows that even as the Mayan Calendar comes to an end, the world and mankind shall go on and on…

And now the stock markets are much higher…

Those caught up in the gloom missed the rally again for the stock markets are now significantly higher. The US stock market is up almost ten percent in 2012 alone and is up some 30% from the bottom. All this reflects a positive long term outlook and improving fundamentals.

There is more, much more to come…

The markets remain very attractively priced especially when compared to the measly interest rates that prevail. The Mayan calendar is wrong and so are the numerous doomsayers, we are convinced of that. Peak oil is a theory that is being drowned in a sea of oil. We will solve our problems even though it may be done by patchwork and mankind shall go on. World stock markets will move significantly higher over the years reflecting low interest rates, growth around the world, and mankind’s will to move higher, innovate and move on to bigger and better things.

We are optimistic, we are buying…

We continue to be buyers of high quality stocks and are convinced that markets will provide rates of returns that are significantly higher than bonds and other asset classes, as it has in the past. We urge you to remain positive and think long term. We have produced for you a familiar chart that shows how well stocks have done over time when adjusted for inflation and have out done just about every asset class including gold.

General Market Commentary


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