Yeske Buie Weekend Digest 5/1/2009

Today is the first day of May, also known as May Day. Depending on your state of mind, that phrase might refer to a distress call, a Marxist celebration, or the day we all dance around the maypole. On this particular Friday, I think we’ve earned the right to dance. Have a great weekend!

Changes under way at DFA

You should have received proxy voting materials from Dimensional Fund Advisors by now. You’re being asked to elect the Boards of Directors of Dimensional’s four investment companies and to vote on proposals which are intended to increase the funds’ abilities to attract and retain the best Directors and enhance the funds’ operating efficiencies in numerous ways, such as standardizing investment restrictions across multiple funds, creating greater flexibility in cash management for multiple funds, and minimizing costs associated with redemptions. These proposals will also simplify the funds’ prospectuses, making the investment process, the investment restrictions, and the associated risks more consistent across all of DFA’s strategies.

Yeske Buie is recommending that all of our clients vote in favor of these changes, which we believe will enhance fund efficiency and lower expenses, among other benefits.

To find more information and/or vote, go online.

How to Get Help

And don’t forget that our updated client page (https://clients.yebu.com/) offers a full list of who does what and who you should contact for help with various issues. Contact numbers and email links are available from that page as well.

25 Years to Bounce Back? Try 4 1/2

Mark Hulbert, editor of the Hulbert Financial Digest, pointed out in the New York Times last Sunday that the stock market recovered from the lows following the 1929 crash in a mere 4 1/2 years, not the 25 years so often reported. What accounts for the discrepency? The more pessimistic analysis fails to take into account three critical factors: dividends, deflation, and the distinction between the Dow Jones Industrial Index and the market as a whole. Check it out and see what you think.

12 Reasons to be optimistic

Economist Ed Yardeni offered up his list of 12 reasons for optimism in the Wall Street Journal this week. Reason #11: “Condé Nast has decided to shutter Portfolio after two years of struggle. The introduction of the glitzy magazine about Wall Street launched in the spring of 2007 marked the end of the bull market. Now its demise may mark the end of the bear market.” See the other eleven reasons.

IDTT: It’s Different This Time

Or is it? As Mark Twain said, “history may not repeat, but it sure rhymes.” Robert Arnott and John West examine the evidence of the past year and conclude: yes, it’s different in the short-run, but not in the long-run. And that means it’s time to be a contrarian.

Quote of the Day

“We know that what is comfortable is rarely profitable … and the most profitable opportunities are often the most uncomfortable investments to make. For this reason, contrarians form a disproportionate share of the world’s all-time greatest investors.”

Robert Arnott and John West