David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

Parsing Tax Reform Legislation

November 20th, 2017

Earlier this month, Congressional Republicans unveiled the details of their much-anticipated tax reform plan.  Ostensibly, their goal is to simplify the tax code by eliminating a host of loopholes, broaden the tax base, and lower average tax rates for both individuals and corporations.  The premise is reasonable enough—the execution is where it gets tricky. Read the rest of this entry »


3rd Quarter 2017: World Markets Keep Rising & Nudge Rewarded

October 13th, 2017

If you feel like “déjà vu all over again,” to quote Yogi Berra, you’re not mistaken: US and international stocks rose during the 3rd quarter, bringing returns in the high teens over the past year, including dividends. Here at home, the stock market’s performance is underpinned by favorable fundamental factors: interest rates and inflation remain low, and growth in per-share earnings remains robust, at about 10% to 12%, year-over-year. Further growth is expected thanks to continued expansion of the global economy and optimism about potential US corporate tax cuts. For now, at least, the devastating impact of recent floods, hurricanes, and wildfires affecting large numbers of Americans has so far been shrugged off by consumers and investors’ alike.

This does not alter our cautiously optimistic stance from prior commentaries, and we continue to expect low single digits average returns from US stocks over the next 5 to 7 years. Pockets of value remain hard to find in US equity and bond markets. Now is not the time to let your allocation to risky assets drift above the target that was set to achieve your long-term goals, the so-called strategic asset mix. As John Templeton observed: “Bull markets are born on pessimism, grown on scepticism, mature on optimism, and die on euphoria.” At this stage in the bull market, maintaining the discipline to periodically rebalance into safer and less volatile asset classes is key, even if doing so appears to sacrifice potential short-term returns. Read the rest of this entry »


Productivity Conundrum, Market Power & Equifax Hack

September 19th, 2017

In recent years, one issue that has vexed economists is the rather sluggish pace of U.S. Real GDP growth (less than 1.5% per year over the past decade).  What makes this data point especially confounding is that it overlaps a period where several other macroeconomic indicators are trending strongly in a positive direction.  The unemployment rate, after peaking at nearly 10% in the aftermath of the Great Recession, has declined to only 4.4%.  Stocks have also done well, with the S&P 500 index nearly quadrupling from its recession-era low.  Read the rest of this entry »


The Next Crash is Upon Us!

August 18th, 2017

Hardly a day goes by without an article predicting an impending stock market crash. As we reiterated in a recent commentary, now is not the time to chase hot investments. However, we do not profess to have any insights on the timing of the next crash, and we certainly do not advocate selling your stocks or stock funds. Since we are now 10 years removed from the onset of the last financial crisis, we’d rather draw a few lessons from history: Read the rest of this entry »


The “Nifty Fifty” Becomes the “Nifty Five”

July 24th, 2017

Global capital markets were broadly higher in the second quarter, continuing the trend from Q1. Within our typical client portfolios, 10 of 12 asset classes notched positive returns for the quarter (your own portfolio results may differ – please refer to your Quarterly Portfolio Review Report). The following table shows the recent benchmark returns for every asset class in a 60/40 model portfolio, for the periods ending June 30, 2017:

Year-to-date, the only category still in negative territory is natural resources, where weakness in energy markets (primarily oil and natural gas) has outweighed recent positive trends in precious metals and agricultural commodities. Moreover, returns for this category are negative in trailing 3, 5, and 10-year periods. Even though our allocation to natural resources is quite small, this persistent lag is possibly a source of frustration to many clients, so it’s worth revisiting the role these assets play in the portfolio. Read the rest of this entry »

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