March 10, 2009
Greetings,
At times like this, one attempts to peer beyond the obvious and look for any faint signals in an otherwise bleak situation which might indicate a bottoming process, if not yet a turnaround. When someone like David Kelly, JP Morgan's Chief Market Strategist, with all the resources he has at hand, publishes his thoughts on developments in the areas of paramount concern to us and investors today, there is little to be gained in paraphrasing his work under our letterhead.
So we commend the following article to your attention with the additional comment that to Dr. Kelly's "Turnaround Indicators," we would suggest a footnote that investors' cash reserves sitting on the sidelines today amount to almost $7.0 trillion. This is nearly 70% of the current total value of the entire U.S. stock market capitalization (i.e., the total market value of all U.S. equities), an unprecedented level of cash awaiting redeployment into marketable securities. These reserves won't all re-enter the markets at the same time, but once confidence in the financial markets stabilizes, the negative cash flow burden will lift and investor psychology should improve.
For those interested in further commentary by other portfolio strategists of note, click on the hyperlink below which will bring you to an NPR interview with David Swenson, Yale's endowment manager, whose counsel is often worth considering.
As always, your thoughts, comments and questions are most welcome. Please contact us via email at tfc@tfcfinancial.com or call us at 617-210-6700.
Regards,
James L. Joslin
Chairman & CEO
http://www.npr.org/templates/story/story.php?storyId=101400310