In a play on one of the old western movies, “The Good, The Bad and The Ugly” over the next few posts we will highlight the three most impactful presentations from our conference before digging deeper into other information that we gathered that may be slightly more detailed in certain areas.
Liz Saunders, Chief Market Strategest for Charles Schwabb was the final speaker of the conference, speaking late Wednesday morning and was by far the most bullish of all the presenters. We have labeled her “The Good”.
Liz believes it is possible we are out of the recession as of today. She certainly acknowledges the possibility of an event that may slow the recovery (something we have been saying for some time) but thinks there is a good possibility we have economically bottomed as of today and are on our way to a recovery.
Some of her key points:
- Analyst expectations are now within reason (Donald wrote about this extensively in several of our early posts, and as such we are 100% in agreeance with Liz on this point)
- LEI (Leading Economic Indicators) are getting better (We agree)
- Cash on the sidelines that will move into the capital markets (We are skeptical of this, but again acknowledge that much money has been pulled from the capital markets at the exact incorrect time)
- Housing Market may be getting close to a bottom (We are more positive that housing is gaining traction, but think we still have work to do in this area)
- Inventories are declining (Interestingly this is a recurring theme over various presenters and we agree inventories, broadly for our country are down, but are not as sure on the recovery based just on this point)
In closing, Liz was asked if she feared inflation in the pending quarters, while somewhat worried, she acknowledged the importance of a withdrawal of expenditures in the future to counter the great spending the government is doing today, rightly so in her, and our opinion, to keep inflation in check. Again for these reasons, we label Liz “The Good”. JK