Yeske Buie Live Big Digest – October 8, 2010

Yeske Buie Live Big Digest – October 8, 2010

The sun is shining on both coasts and the Dow is trading above the “psychologically-important” 11,000 level, so I guess all is right with the world as we prepare for the weekend. As you’ve heard me say many times before, there is a connection between the markets and the weather – and no, it’s not that you can use sunspots to predict stock prices, although it has been tried.  The real connection comes from the fact that both are more readily modeled using complexity theory (of which chaos theory is a subset) and they are both, therefore, rather immune to short-term prediction.

But that doesn’t mean we can’t enjoy it when the sun shines.

Have a great weekend!

Sunshine almost always makes me high . . .
(to quote John Denver)

Staying with our weather theme, and in the spirit of a sunny day and the promise of a sunny weekend, we thought we’d restrict ourselves to sunny indicators in this issue of the Live Big Digest.

Let’s begin with the comments of three prominent CEOs – Warren Buffett of Berkshire Hathaway, Steve Ballmer of Microsoft, and Jeff Immelt of GE – all speaking at the recent Big Sky Conference.

Warren Buffett
• “I’m a huge bull on this country…we won’t have a double-dip recession. I see our businesses coming back almost across the board… It’s night and day from a year ago.”
• “I’ve seen sentiment turn sour in the last three months or so, generally in the media. I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago.”
• “The things that worked for the country through a century of two world wars, a depression and more—all while increasing the standard of living—will work again.”

Steve Ballmer Microsoft
• “There soon will be more technological advancement and invention than there was during the Internet era, and that will help drive business growth.”
• “I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries.”
• “We will see new technologies that move beyond the Internet to tie together computers, phones, televisions, and data centers to create amazing new products. And the pace of innovation will increase as technology makes workers more productive.”

Jeff Immelt, GE
• “Angry political rhetoric is not helpful, and headlines are too focused on finding negative indicators.”
• “Business at GE is improving. Signs across the world show growth improving, as evidenced by a rise in GE’s orders.”
• “GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is more competitive to do so.”

It’s of note that these positive and under-reported views are supported by recent research from McKinsey & Company, today’s leading strategy consulting firm and the first place many Fortune 500 CEOs look for advice.

McKinsey surveyed 2000 executives around the world in early September.

• Almost 60% said their country’s economy is in recovery.
• Most expect profits to rise from last year.
• And nearly 40% expect to hire employees by the end of 2010

New Webinar Scheduled!
We will be broadcasting our next webinar, “Groundhog Day,” on November 18 at 9:00AM Pacific Time / 12:00PM Eastern Time, so mark your calendar!  We’ll be following up with registration information in the coming weeks.

“History may not repeat, but it sure does rhyme.”   Mark Twain

And speaking of complexity theory . . . our new webinar will be a review of some of the enduring characteristics of the economy and the markets and how, even amidst the chaos, it’s still possible to craft investment strategies that can carry us to our goals.

Why the Economy is a Lot Like the Weather

Since I’ve mentioned it again, and because some of the links on our website have changed, we thought we’d once again direct your attention to our piece on markets as complex (chaotic) adaptive systems.

 New Website Goes Live
Actually, it’s still “going live” even as I write this.  We’ve not only revamped the look and feel of our website, but are also making improvements to the Client Private Pages which we hope will greatly enhance their value as a shared workspace.  As part of this update, however, you may experience (or have already experienced) some service interruptions.  For that, we apologize. All such interruptions should cease by the end of this weekend and we thank you for your indulgence during the transition.