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

4th Quarter Review: A Rising Tide Lifts All Boats

January 27th, 2018

Global capital markets appreciated virtually across the board in the 4th quarter, capping off a strong year for investor returns which saw domestic stock indexes once again close near record highs—boosted by U.S. tax reform legislation passed in late December.  Read the rest of this entry »


Benchmarks and Bitcoins

December 20th, 2017

As 2017 comes to a close, investors have much to be thankful for. At the time of this writing, US stocks are up more than 20%, international and emerging markets stocks up even more in the 25% to 30% range, and bond funds are also in positive territory with low to mid-single digits returns year-to-date.

As a result, some investors may think: The S&P 500 is up 20% this year, so why is my portfolio only up—fill in your number—%? The S&P 500 may seem like a reasonable performance benchmark. After all, it is the most widely discussed proxy for U.S. stock market returns. In addition, some of your acquaintances are already bragging about how much money they made in stocks (or in bitcoins—more on that later), and the pressure naturally mounts to do something about it. We urge you not to listen to this siren’s song. Read the rest of this entry »


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 »

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