2006 Begins
A new year sets the stage for renewed optimism and commitment. That is what we have seen so far in the financial markets. After a year in which most market averages did not move appreciably in either direction, markets have started 2006 on an upswing. We welcome the move but point out that finding investments of enduring value, no matter what time of the year, is the name of the game for building wealth over the long term. Indeed, the best values ore often found in the midst of summer doldrums or late winter blues and not in a time of new found exuberance.

We hope you are pleased with account performance in 2005, as most did much better than the market as a whole. Positions in energy, materials, healthcare, and industrials carried the day. Financials started a rebound that should last into 2006. Retail as well as technology investments are of interest to us, but we are mindful that changing tastes and technology can often make the risk of these not worth the reward. We are stepping up our research efforts into international investments as well as companies in special situations or undergoing spin-offs or turnarounds. No matter what the area, good investments can be found if a company has assets or earning ability that is not fully understood or appreciated by market participants with a short-term focus and herd mentality. In fact, small investors with the right attitude can have a tremendous edge over the billion dollar hedge funds that often must panic out of investments so as not to damage a quarterly performance report. Since many hedge funds move together, insignificant company news, wrongly interpreted, can slam a company's share price. This is where we come in, as your eyes and ears on the market, to understand what the real story is and, weighing risk vs. reward, take advantage of pricing anomalies and collect such mispriced companies, wait for the rebound and, hopefully, long term appreciation.

Turning our attention back to the renewed optimism of a new year, Arrival Capital continues to seek to improve our performance and customer service. Please feel free to contact us with any questions and concerns you may have, or just to chat about your finances. If you are satisfied with your account's performance and know anyone that might stand to benefit from our brand of prudent yet opportunistic investing, please feel free to refer them to us. Have a happy and healthy 2006.
- posted by Jay @ 10:37 AM