February 11th at 10:00 AM
 

 Here is the data since January 1, 2008:

*I use a composite of the Nasdaq and the S&P 500 indices as a proxy for the overall market.

         The most important points to continually reiterate are that these are, indeed, precarious times and that volatility and uncertainty will continue to plague the markets and the world economy.

         The only wise thing to do in these circumstances is to do exactly what we are doing- buying superb, financially secure and dominant corporations, defensive positions in precious metals and maintaining a huge position in short-term Treasury bills.

         Much of what will happen in 2009 is unknowable at this juncture so the appropriate response is to maintain a flexible (with great emphasis on the flexible) and conservative portfolio. It is certainly not a time to be aggressive and to make bold bets and nor is it a time for the "stuff it under the mattress" approach to investment. There is a non-trivial chance that short-term bank and Treasury investments, and cash itself, will be quite dangerous to one’s financial health in 2009.

         In other words flexibility and hard work will be the keys to a successful 2009 as they were in 2008.
 
         We are always risk averse and nothing has changed in our approach in the last 12 months. We are value investors and we seek value wherever it occurs and in whatever form. We expect to be very active in the coming year as we work to protect your assets.

           Congress is currently in the midst of discussions regarding a further expansion of the massive bank bailout and the equally massive stimulus via public sector spending. I tend to believe it will not work as intended and that the side effects will be horrendous but I would be, in this case, delighted if my opinion was wrong.

         There is the distinct possibility that things will get much worst in the year(s) ahead, but I cannot imagine the scenario where the potential damage will have a significant impact on the financial plans of our clients.
 
        We will continue to work diligently on your behalf and, above all, we will remain calm. Please write or call with any questions.