Decoupling

I was wrong back in June about how the market would break. I guess I was too optimistic as we saw the opposite of what I thought would happen, a 25% drop in the S&P. This has actually created many opportunities in both the credit markets and stock markets. It was thought just six months ago that by investing in BRIC countries you would protect yourself from our downturn. In fact, I argued with a PM at WAMCO about decoupling and how we buy the goods from the rest of the world. Meaning, if we go into a recession, theirs will be deeper and longer. This is now the case as everything as correlated. As fear abounds, smart investors are buying great franchises like American Express or Costco at bargain prices. I believe we are nearing the bottom of the margin calls and a turn in the market. Look for great returns over the next 5-15 years.