A summary of what some of my favorite investment gurus said in their 2005 Quarterly reports.
|Cash balances /Opportunities / Valuations||Some high (Clipper, LongLeaf and Wietz);others retain their usual low cash(Bill Miller says, “No point holding cash @ 2%) Dodge & Cox has only 6% in cashValuations are not demanding; just about right.||Slightly more opportunities than Q1. But, not much excitment and notthing bad either.||“For the first time in two-and-a-half years all three Funds have cash below 10%…” and “…we are more optimistic about our portfolios than we have been in over two years…”
[Longleaf]finding things to invest in. [Dodge & Cox]”…now we are getting excited” [Weitz]
|still finding things to invest in. Opportunities from globalization. Cash balance is about 5% [Dodge & Cox]2005 was stable and 2006 appears to be a generally positive environment as well. Real-estate might cool, and there’ll be scary headline, but on balance things look fine. Fund underperformed the S&P for 2005, but underlying values increased.|
|Other||Hurricane Katrina in New Orleans affected Q2 for some firms; but the market seems to have shrugged it off even though 400,000 job losses are expected and a loss of over $30 billion.||xxxx||xxxx|
|Market||Despair amidst good profitability||xxx||xxxx||xxxx|
|Misc predictions||Long rates will go up at some point, pushed by short rates (Wietz)Miller thinks the Euro is overvalued||xxx||“Three long-term trends appear to be pushing the world economy into a fertile and productive period” (Tech, Globalization, & strong U.S. economy)
[Dodge & Cox]
|“Real-estate might cool, and there’ll be scary headline, but on balance things look fine ” [Weitz]|
Bill Miller [Q1 report], quotes Sir John Templeton (though he isn’t sure if he’s really the source), speaking of bull markets. They are: born in Pessimism (2001-2002)grow in Skepticism (2002- ???)mature in Optimism die of Euphoria.