It may seem a bit cliché to list the things for which I am thankful at this time of year, but Thanksgiving is such a wonderful holiday exactly because it offers us a chance to reflect on the good things in our lives. Thanksgiving is also the last major U.S. holiday that has yet to succumb to consumerism (some may argue this point given its proximity to “Black Friday” and the consumer feeding frenzy it has become, but I would submit that “Black Friday” has nothing to do with the Thanksgiving holiday itself. So there!)
So without further ado (and apologies to David Letterman), here are my top ten reasons to be thankful this year:
10. The New Bull Market. Many still cling to the fantasy that a 60%+ market move can be nothing but a bear market rally. I believe they are wrong. This new bull market began exactly where one would expect it (in the middle of the recession and at the peak of pessimism) and has climbed the proverbial wall of worry as economic data throughout most of the March to July period continued to show weakness.
9. Low Interest Rates. Not only do they help certain troubled industries (autos, housing, banks, etc.), but they are forcing investors to seek assets which can provide higher returns – like stocks…
8. Tons of Cash on the Sidelines. Many investors still fear the stock market. Even after this huge rally and the beginning of a new bull market, many folks still hold a huge amount of their wealth in cash or money market funds earning less than 1%. I view this as dry wood which will eventually be used as fuel to propel the market even higher.
7. Mixed Investor Sentiment. Some people are calling for a “double dip” for the economy. Some still think that testing the March lows is a possibility. Some think gold is the only “safe” asset. Some are seeing new bubbles around every corner. Some think the government is somehow propping up the markets. What a fine, grand debate we have here! The minority opinion still seems to be that stocks can move higher from here. I guess I’ll have to side with the minority opinion (yet again…)
6. Graham & Dodd. The “fathers” of value investing gave me and others the tools to analyze stocks in our search for excessive returns. Their work represents the foundation of my career and investment philosophy. Their work has enabled me to spend my research efforts on measuring and not predicting.
5. Value Investors. The “children” of Graham and Dodd, such as Warren Buffet, John Neff, Christopher Browne, John Templeton, Marty Whitman, Bruce Berkowitz, etc., have provided me excellent role models, showing me that this value investing approach is workable and can be successful.
4. Jim Cramer and CNBC. As long as the media feels the need to provide us with an endless stream of “free” investment advice, I feel that my voice, which I hope is a voice of reason, needs to be heard.
3. The First Amendment. I’m thankful for a country which allows my voice to be heard.
2. Thomas Jefferson. Still my favorite founding father and a major inspiration to me. “If we can prevent the government from wasting the labors of the people, under the pretense of taking care of them, they must become happy.” Letter to Thomas Cooper (1802).
1. Opposable Thumbs. Most excellent for holding my grandsons, tossing the football at our annual “Turkey Bowl” and, of course, grasping that big drumstick at the big meal tomorrow surrounded by family and friends.