The recent sharp market declines remind us of how quickly and dramatically assumptions and emotions can change in the investment markets. As the slowdown in Asia and the collapse of the Russian market reminds us global markets are connected. Clearly, non-domestic market turmoil may advance the slowing corporate profits that we have been writing about in our quarterly Commentaries.
Stocks only go up.
We believe the clock has run out on this type of thinking. These conclusions are likely to be tested and disproved in the coming years as the assumptions upon which they are based change dramatically. Fundamentals and Valuation will start to matter. Investors may actually look at balance sheets with a more careful eye. As a fundamentally-oriented investment manager, we see tremendous value and opportunity in the market, as this shift begins to take place.