Argent Quarterly Investment Commentary – January 2011
“When you have an elephant by the hind legs, and he is trying to run away, it is best to let him run.”
Frequently, the best returns for stocks are when expectations are lowest. So it was this past summer when a sudden resilient private sector, combined with positive income tax legislation, led to run away stock market returns for both the third and fourth quarters of 2010. This was quite a turnaround from May and June when the stock market hit the proverbial wall. Worries primarily over problems in the Euro-zone had led to a second quarter bear market, but such fears were fleeting, and stocks had rediscovered their audience by Labor Day. It was not that the economy was doing so well; rather that the valuation in the stock market simply reflected too much bad news and other investment options offered so little upside.