Found via ValueWalk.
Our views on the economy are not terribly original and have not changed significantly in the past six months. It’s a challenge finding new ways to say the same thing. So we won’t. We think our past commentaries effectively communicate our longstanding view that as we exited the 2008-9 financial crisis, the average Joe on the street was left with less in his bank account, a diminished home value, and what stocks he did own weren’t worth as much. When Joe could afford less, the U.S. government stepped in and spent in his place, and hasn’t stopped spending since. What the Joes of the world can’t afford, the U.S. government apparently can – but don’t ask us to explain that “new” math. The recovery has been disappointing and largely ngineered by central bank policy. We worry that low interest rates and novel and theoretical Fed policy could lead to unintended consequences.
The past quarter included a brief hiccup when investors considered their exposure to low interest rates in the event the Fed allows rates to normalize. There was a lot of discussion in the media during the past quarter regarding how and when Ben Bernanke intends to taper the purchase of bonds by the Federal Reserve. Interestingly, we can’t recall having a single conversation internally about the taper, as this simply isn’t how we look at the world. We are worried about how a business and the world might look three to five years from now, not next quarter. In fact, if one thinks back five years, the world has dealt with a great financial crisis, potential currency collapse and fears of sovereign liquidity, just to name some of what we have seen. Through it all, we invested with a long-term strategy dependent on patience, discipline and a focus on long-term value. With an average holding period of roughly five years, we strive to add value over a full business cycle rather than try to guess where central bankers may move interest rates.