Early Release of Monday, March 8, Write-up
This week’s news reports have been filled with better-than-expected news about the economy, industries and companies. Importantly, this good news has made its way beyond the “leading” indicators to the “coincident” ones, confirming the economy’s recuperation is on track.

The risks we are used to hearing about – e.g., depression and deflation – are about to fade away. This change exposes two very powerful drivers: upside risk and panic buying. These forces can create an atypical bull market. Rather than the usual pattern of three steps forward and one step back, the picture is like a rocket launch: vertical.

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Last week, once again, US investors placed most of their equity mutual fund purchases into international stocks. They love the growth going on elsewhere, especially in emerging markets.

But wait! The news out of China is that it is investing in US stocks and real estate (“China’s investments in U.S. up sharply – The strategy seeks higher earnings by acquiring assets while prices are depressed,” Los Angeles Times, March 4).

They’re savvy money managers, so what do they see? In a word: Value.

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When a product or service goes bad, there are three natural reactions: To punish those responsible, to help those harmed and to ensure it doesn’t happen again. I want to address the third item, which typically involves congress and government agencies ramping up protection for users.

During such periods, we need to keep our expectations realistic and our reactions separate from our investment decisions.

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Avatar and Up nominated for Best Picture Academy Award? A science fiction movie and a cartoon? Just shows you that Hollywood is… well, what?

Answering that “what?” actually gives us a window into the future stock market winners – and that future, delayed a bit by the economy’s recent turmoil, now is closing in on us.

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