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

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 »


This Storm Too Shall Pass

November 9th, 2016

As you all know, the results of the US Presidential election were not what investors around the world anticipated. Surprise and uncertainty breeds volatility. Similar to the aftermath of Brexit last June, when UK voters approved to leave the European Union, markets around the world and the dollar are reacting negatively as we write this note.

We do not have a crystal ball and therefore cannot predict how much they might decline and whether they will recover as quickly as the UK market did before going to new highs since then. What we do know for sure is that, today, as you read the news and listen to the pundits, your financial objectives remain the same: your children’s college tuition needs to be paid, your life expectancy is the same, and your retirement income from social security still needs to be supplemented by your savings…

Looking at your portfolio, the portion invested in equities will decline with the stock market, but other parts will not be affected as much. Some investments might even go up a little in what is called a ‘flight to safety’. This short-term volatility does not mean that your portfolio’s asset allocation will not be able to deliver the long-term return that you need to reach your goals.

We always like to compare investing with sailing: we know that we need to sail across the ocean to meet our objectives. We also know that there will be storms along the way, and that sometime, we might run into dangerously choppy seas. So, we built a diversified portfolio capable to sail across and handle bad weather. It might take some water on board during the worst storms, but it will not sink. It is important, however, to keep a steady hand on the wheel to make it safely to port on the other side. Like numerous others before, this storm too shall pass. History teaches us that we should ride it out.

As always, feel free to call us if you wish to discuss further.


On Market Timing, Fund Selection, Benchmarks, and Social Security Scams

August 17th, 2016

Since the low back in February, and as we write this post, the S&P 500 has increased by more than 20%. This is remarkable considering the events of the past 6 months, such as the UK vote to exit the European Union, and the seemingly never-ending flow of terrorists’ acts around the world. Our regular readers know that we believe attempting to time the market is destined to produce poor investment results over time, and this recent period provided another vivid illustration.

Not surprisingly, two of the categories in your portfolio that have done the best recently are the ones that did the worst in 2014-2015: natural resources and emerging markets. As the investments in these categories delivered poor overall returns for a while, some of you may have wondered if we ever sell a fund that is underperforming. Read the rest of this entry »


Brexit and Your Portfolio

June 24th, 2016

On Thursday, British citizens voted in a national referendum on whether or not their country should remain a part of the European Union (E.U.), of which it has been a member since 1973.  At stake was Britain’s relationship to a much disliked supranational institution, and what this means for trade, sovereignty, and security.   Proponents of a British exit (“Brexit”) voiced populist sentiments focused on preserving a sense of British national identity, as well as securing Britain’s borders in the midst of the E.U.’s refugee crisis.  Those in the “remain” camp (which included most business executives and economists) emphasized the benefits of free trade and open labor markets, and cautioned against the unforeseen consequences of an unprecedented defection from the E.U. Read the rest of this entry »


Ignore the Scary Headlines and Stick to Your Plan

January 27th, 2016

2016 is off to a historically poor start, with the S&P 500 down 9% from its May 21 record of 2130.82 as we write this commentary. Although corrections of 10% are fairly common, below the surface, the picture looks even worse. Through January 13th, the average stock in the index is down more than 20% from its 52-week high. This is probably why it already feels like a bear market to many investors (the common definition of a bear market is a decline of 20% or more from a recent high).

When stocks begin to fall hard after a lengthy bull market, it inevitably leads to some anxiety and soul-searching, which may trigger a need to do something about it. So it is important to remember a few things: Read the rest of this entry »

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