Inspiration By Colin Powell, Raging Higher Markets C/O Jeremy Siegel, Economic Fits with Craig Alexander

During the conference in San Diego, CA, last week, I had the opportunity to listen to many great speakers and terrific viewpoints. Here are a few items from the top three speakers,  in my view:

Colin Powell

Colin Powell who spoke for approximately two hours, not only on a few very delicate subjects, but also with self deprivation humor, quoted

“I wish I could put all of President Reagan’s optimism in a bottle and pour it over the heads of the politicians in Washington and say, Let’s get on with it!”

Regarding China as an enemy :

“The only battle with China will be at Wal-Mart over the size of shelfspace….they are our friend and wonderful competitor…”.

On work ethic and Perfection: 

“You never get it perfect, just getting it better is super, as long as we keep getting better…”

My favorite inspirational closing quote,

“It is not where you start in life but where you end up!”

 

Jeremy Siegel

Professor and noted Author Jeremy Siegel, led another terrific discussion, more directed towards capital markets and statistics. 

His most interesting topic, in my opinion happened to be about P/E ratios, which coincidentally you may recall was the subject of our last post.

According to Professor Siegel’s research, the 50 Year Average P/E ratio when interest rates are below 8% is a stunning 19 ! (Yes, Nineteen!)

From his point of view the capital markets, currently at a 14 P/E ratio, could rally by 20% and still not be at Professor Siegel’s average. (We sure hope he is correct!)

Another very interesting statistic concerning the E, in our P/E ratio, again check out our last post for a quick P/E refresher if necessary.

According to Professor Siegel, who also likes the S&P 500 (our favorite too) as a barometer for the US Economic situation, earnings were $91.47 for the S&P 500 on June 2007, the top of our capital markets before the recession, and will hit $95 later this year. Professor Siegel sees the market easily claiming new highs given this fact. (Again, we hope he is correct!)

Craig Alexander

Lastly, economist Craig Alexander, left a big impression as well.

According to Mr. Alexander’s research, Financial Crisis led recessions, like what we just had are:

  • 2 times as long
  • 2 times as deep and
  • 2 times as slow to recover

In his opinion, the Emerging Markets pulled the world through the latest recession, but may be fully valued currently.

The true unemployment rate is around 16% and will take some time to recover, thereby keeping a lid on inflation and interest rates, according to Mr. Alexander.

His most impactful quote for me:

“Investing for the next five to ten years will be like driving in the fog, there will not be a clear picture and there will be issues that emerge suddenly….. Get used to it and get over it, or you will be left behind!”

I hope you enjoyed my quick review of the high points on the San Diego conference. It is always nice to get away, but even nicer to get back!

Have a Great Day and a Super Week !

JK

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