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 “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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1st Quarter 2017 Review: Another Positive 3 Months

April 12th, 2017

U.S. stocks continued their march higher during 2017’s first quarter. The S&P 500, an index tracking the 500 biggest companies traded on US stock markets, was up over 6% in the quarter, and is up more than 17% over the past 12 months (including the reinvestment of dividends).

For most of the quarter, investors remained upbeat that a Donald Trump presidency would result in pro-growth policy changes, including changes to the tax code, rolling back of regulations, and infrastructure spending. Doubts emerged after a failed effort to reform U.S. healthcare in late March, which helped pharmaceutical stocks. Read the rest of this entry »

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4th Quarter Review: American (equities) First

January 26th, 2017

U.S. equity markets pushed broadly higher in Q4 and for calendar 2016, boosted by investor optimism that President-elect Trump’s administration will usher in a wave of business-friendly initiatives including reduced government regulation and lower corporate tax rates. For the first time in 17 years, all three headline domestic indexes (Dow 30, S&P 500, and Nasdaq), finished the year at simultaneous record highs. In a reversal from last year, the strongest returns in 2016 came from Small Cap and Value stocks, as summarized in this heat map of US fund category returns from Morningstar: Read the rest of this entry »

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3rd Quarter Review: More of the Same

October 13th, 2016

In economic news, it was pretty much more of the same. The US economy continued to grow at a tortoise pace during the 3rd quarter. On a positive note, wage growth is accelerating and residential real estate values continue to increase around the country, which bodes well for the future. Typically, as people earn more, and feel wealthier, they also spend more, and in doing so drive further growth. Although the US Federal Reserve did not increase rates at its meeting in September, expectations are that it will do so in December.

In Europe, on the other hand, growth remained elusive. Governments appeared more inclined to relax the austerity policies that have been the hallmark of the past few years. The British pound felt the strain from the uncertainty that comes with the Brexit vote. The business community has the most at stake if trade with England’s partners suffers. There is a risk that investment will slow down in the UK, and possibly in continental Europe, until a clearer picture emerges of the terms of separation from the European Union. In the rest of the world, Emerging Markets recovered dramatically this year. Latin America and particularly Brazil led the way on investors’ hope that the impeachment of President Rousseff will lead to more market-friendly policies going forward. Read the rest of this entry »

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2nd Quarter Review: The Brexit Blip

July 25th, 2016

With the benefit of a month’s hindsight, market fallout from the Brexit campaign appears surprisingly short-lived, particularly in the U.S.  Following a brief selloff in the few days following the June 23rd vote, the S&P 500 rallied over 8% in the next few weeks, hitting a fresh all-time high by early July.  European equities, while still modestly negative for the year, also regained much of the ground lost after the Brexit vote.  Neither a terrorist attack in Nice nor an attempted coup in Turkey did much to slow the rebound.

In fact, aside from a few funds with significant exposure to European stocks, every other asset class in our client portfolios appreciated during the second quarter.  The best performing funds were in the commodities and natural resources sectors, which benefitted from a strong rebound in energy prices.  Oil prices increased 30% during the quarter, while natural gas rallied 48%.  These two commodities were key drivers in the performance of the Bloomberg Commodity Index, which advanced 12.8% in Q2 and finished the first half of the year up 13.3%. Read the rest of this entry »

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