Reading: Politics And Markets, Valuation and Other Interesting Stuff

  • Politics has become so interwoven with finance that you need a degree in politico-economics to get investing in this market right – Jim Lowell
  • Elections have consequences.  President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years.  If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course. – Paul Krugman , “Climate of Change”, The New York Times, February 27
  • Those of us who consider ourselves moderates — moderate-conservative, in my case — are forced to confront the reality that Barack Obama is not who we thought he was.  His words are responsible; his character is inspiring.  But his actions betray a transformational liberalism that should put every centrist on notice.  As Clive Crook, an Obama admirer, wrote in The Financial Times, the Obama budget “contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal.” – David Brooks, “A Moderate Manifesto”, The New York Times, March 3


  • Valuation is the wrong concept in a secular bear market.  If we continue to see earnings drop from forecasted levels, as we have for over a year, then it is possible we could see more pain.  Valuation is subjective in such a climate.  When earnings start to stabilize, and we can get some visibility, then we can talk about fair value. – John Mauldin, Chief Investment Officer, Millenium Wave Investments
  • What’s the difference between 12-times or eight-times or 10-times earnings?  There isn’t demand for equities, because people can’t see any signs of recovery soon. – Peter Bookvar, Equity Market Strategist, Miller Tabak
  • I’ll leave the fundamental analysis to others but it seems to me that Apple is not going out of business.  Nobody can really say the same about many banks, automakers and retail stores.   Now, I am not specifically recommending buying Apple now or ever.  I just want to point out that unless the economy is going to fully implode, the idea that a long-term investment in stocks — with proper risk controls in place, of course — is not such a crazy idea.  – Michael Kahn
  • “Buying stocks is a potentially good deal if you’ve got a long term perspective” – President Obama

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