August blahs............

I knew we were close to a short term rise in the market. I took a call this week from a wonderful client. He sounded worried. He said his portfolio had come off the high water mark we set earlier this year. You see, clients generally call when a turn in the market is at hand. More often than not, they want to do the wrong thing at the wrong time.

From my vantage point, I figured the market was going to pull back in the late spring. It did. A nice pullback given the moves in gold, crude oil and interest rates. Markets move up and down on greed and fear, pain and pleasure, supply and demand. Human emotions haven't changed in 10,000 years. Indeed technology advances have brought faster moves, great volatility.

I told this fine client of Chippewa Partners that the market was in a short-term pullback. A normal correction. His account isn't managed on an absolute basis it is managed on a relative basis. I told him this correction would eventually change and the market would go on to higher highs. I called this a normal, necessary pull-back irregardless of what is going on in the hills of the Middle East in an area the size of the Indian reservation I grew up on in western South Dakota.

I know clients get caught up to listening to the babble on CNBC regarding short term market swings that have no bearing on the long term performance of their equity exposure.

You see, stocks solve long term problems, inflation being one. Our posture hasn't changed over the last few months of volatility. We remain long term owners of some great companies.