October 24, 2008

Advisor Update 10-24-2008
As I write this comment the markets are selling off again. This is clearly a continuation of the intense deleveraging that began in earnest at the beginning of October. Redemptions are at extreme levels as almost everybody has lost money in real estate, stocks, bonds, hedge funds or all of the above in the last year. Furthermore, investors’ confidence has been dashed as they have recently observed major institutions like Lehman Brothers file for bankruptcy, Washington Mutual seized by FDIC, Merrill Lynch sold to Bank of America in haste and Fannie Mae and Freddie Mac taken over by the government – just to name a few. Fear is still at extreme highs. Investors Intelligence reports their sentiment readings of the difference between bulls and bears are at a rare and very bullish reading of - 32.2%. Only 1.6% of readings since the survey’s inception in 1963 have ever fallen to this level.
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October 17, 2008

Advisor Update 10-17-2008
In my recent newsletter I mentioned some of the spectacularly large spreads present in the corporate bond markets due to the recent extreme aversion to risk by investors. The following charts give us a visual of these extremes. As risk aversion declines to more normal levels in the future, it should provide some excellent total return possibilities in the corporate bond arena.
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