Looking for An Opening
The market as a whole continues to slowly work downwards. Technology stocks, up so much last year, are particularly vulnerable to a continued sell-off as speculation wanes. Our positions in finance, healthcare, and energy are holding up, as are certain special situations, such as companies with terrific, proven management like Fortune Brands (FO), or specialty chemical maker Praxair (PX). Investing, for us, continues to be about finding stocks that will largely go their own way, regardless of the general market direction. For example, we recently established account positions in SFBC (SFCC), a small company that conducts clinical trials for large pharmaceutical companies, is growing briskly, and trades at less than 20X estimated earnings. Often, the best way to move the odds in our favor as investors is to zig when the market zags when it comes to a specific stock or sector. Finding good companies that have sold off because of temporary concerns or perceptions is an approach we will continue to favor, particularly if the market continues its slow grind down.
- posted by Jay @ 6:56 PM

 
First Do No Harm
The markets have been trendless in the past few weeks, bidding up prices of sectors only to turn back a few days later. We continue to like the energy and healthcare sectors and attempt to find other smaller companies whose fate may not turn on the market as a whole. This brings us to an important point -- as a money manager, we fervently believe that our first responsibility to clients is to not needlessly risk and lose client capital. In times with few promising value propositions, we believe clients are better off with cold cash. This is not to say that the search for opportunities does not go on everyday. But at a time when the markets are up strongly over the past year; when uncertainty, unfortunately, reigns in much of the political-international world space; investors are not well served by plunging into to over priced positions or half-hearted speculations. So we will only trade cash for value and not just hope or hype.
- posted by Jay @ 9:41 PM