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


The Return of Greed?

November 20th, 2013

As recent media reports including this article from the Wall Street Journal indicate, the recent run-up in stock prices is prompting some pundits to worry about a new bubble. In the past few months, we, at Bristlecone, have seen anecdotal signs that the memory of the last bear market is fading away and that, at least for some, fear might be turning into greed.  After almost 5 years spent licking their wounds, more investors today are actively seeking better returns by changing advisors.  Bristlecone has seen a pickup in the number of inquiries from prospective clients. Candidly, we’ve also received a couple of concerned phone calls or emails from some of our own clients. In both cases, the underlying fear is that of being left behind, a trepidation typical in aging bull markets: “the market is up 20% in the last 12 months, but my portfolio is only up (fill your number) %.” Currently, this feeling is reinforced by the incessant media coverage of the new crop of high flying internet stocks.

Since US stock prices bottomed on March 9, 2009 through today, the S&P 500 index is up 166% including the reinvestment of dividends, an annual average return of about 19%! Along the way, the S&P reached new summits, higher than the most recent peak in 2007, but also higher than the previous “internet bubble” high in 2000. It now appears that, once again, concerns over not making enough money are overriding fears of capital loss. Are we close to a top? Are we due for a market correction? Read the rest of this entry »

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