So where does this leave us? Have we changed our view of the investment landscape and shifted our asset allocation and stock selection? Broadly, the answer to these questions is no. As we mentioned last week, we turned more positive on the markets after the employment data, as it indicated to us that the Fed was out of the picture to at least December and possibly March. Removing that impediment gave me an all-clear at least for now. I covered many of my shorts and puts, reduced my dollar exposure and added some transportation stocks. I had mentioned last week that the transportation index had bottomed out, which was a good omen for the market.
Yes, this market has advanced on a wall of worry. Personally, I like the broad skepticism as voiced by Barry, Sam, Larry and so many others. Let me repeat, yet once again, that this is a market of stocks rather than a stock market. Stop looking at the averages and drill down to the companies. Change is everywhere and with positive change comes revaluation and higher prices. My longs are comprised of companies whose incremental returns are rising and I am short just the reverse, It's that simple, but clearly takes hard research to find the winners and the losers. That is our strength. By the way, this is a global search and not limited to companies domiciled here. We are global investors who combine a top down economic view with a bottom up in depth research. Hopefully the two come together in our portfolio. So far, so good.