international markets

Portfolio Developments, Emerging Themes

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This has been an eventful year in the markets, to put it lightly. Unforeseen events have had dramatic effects.

We wrote about some of the themes in our portfolios last fall. Airlines and biopharmaceutical companies both seemed attractive, with valuations at seemingly favorable levels. Needless to say, global pandemics turn out to be as great for biotechs as they are lousy for airline travel.

Our natural resource holdings had similar variation. Turmoil helped the shares of precious metal miners and hurt the shares of industrial metal producers as much of the global economy shut down.

We are keeping the long view in mind. The next energy revolution, driven by solar power and batter storage, will still require higher production of copper and other minerals. The decades-long trend toward higher levels of air traffic will resume. These are our views.

As we review the finances and prospects of our holdings and rebalance where appropriate, another theme has emerged. The shares of some basic kinds of companies, those involved in food and shelter and beverages, have gotten to bargain levels, in our opinion. It seems like it has been a long time since we felt that way, and we are excited to add holdings in these lines.

Last fall we believed that international equity markets had some attraction based on value compared to US holdings. We are more excited now about the emerging bargains we perceive here in the US.

Clients, these are the conclusions our principles and our processes are leading us to. If you would like to talk about this or anything else, please email us or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. .

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets..

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

A Better Topic Than “The Market”

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Everybody talks about it; it raises a lot of questions. Is the market too high? Where will it go next? Is it due for a fall? How will the economy affect it? (Or politics, or world affairs, or astrology?)

Many people seem to be referring to a major market average or index when they talk about the market. But the investment universe is far broader than those. The individual pieces may have little to do with what is happening with the major averages.

  • For example, even when the averages are near all time highs, stocks in some industries or companies may be half or less of their own highs from years ago.
  • The United States is not the only advanced economy in the world with a stock market. Some overseas markets have done very little for a decade, and are not close to high points.
  • Certain holdings have shown a tendency to go the opposite direction from the major averages.
  • Even with in the US stock market, some holdings appear to be bargains even when highflyers have gone off the charts.

Instead of asking those questions about “the market,” we think it makes more sense to always be asking these questions:

  • Where are the best bargains in the investment universe? We should be looking at them.
  • Where are the stampedes? We should avoid them.
  • Is there a way to secure reliable income in today’s environment?

This is a way to bring the focus to something useful, in our opinion. Clients, if you would like to talk about this or anything else, please email us or call.