I’m of the opinion that Microsoft long ago stopped innovating, resorting, instead, to copying and trying to improve–often succeeding–what others produce.  On the other hand, Apple never seems to stop innovating.  And here’s the latest example.

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If it sounds like too impressive a headline for this venue, where you’re more used to thoughtless analysis, it is.  I’m including below, verbatim, a dispatch from Cumberland Advisors, on whose e-mail distribution list I am by some good fortune.  I asked David Kotok, the Chief Investment Officer there, who wears glasses, has no hair on top, and has a beard–in a word, he looks smart–if I could reproduce the letter here, and he graciously agreed.  Read on, and relish the thoughtful analysis, after which we shall return to our regularly scheduled insights that are patently obvious. (more…)

So we brought in the Senior Market Strategist from Federated Investors in Pittsburgh, PA., Linda Duessel.  All in all, she delivered a nice presentation to the two groups.  No one should have left the meeting unable to sleep, but each was made aware of some longer-term challenges the economy and markets face.

Overall, her view on stocks was pretty sanguine, at least for the next 190 points in the S & P 500, a cool 13.2% move*.  Beyond that she expressed some concerns that the longer-term might present some hurdles–and she wasn’t afraid to couch the future in the context of Japan’s lost decades, that markets could go sideways for a while, echoing our own thinking (click here for it). 

*  That’s a move that should encounter a couple of stiff resistance zones, but that’s what happens when one multiplies earnings estimates by a P/E — BAM! — 1,250.  To be fair she said 1,250 was the confluence of several estimation methodologies, something that gave her comfort.

As for why the economy’s going to start looking better?  What else? inventory rebuilding, the salvation of all dismal scientists.  In brief, and ad nauseum, businesses have worked–and continue to work–inventories down so low, relative to sales and history, that at the first whiff of strength in sales–or fear of missing sales–they’re going to reload the warehouses so as to not miss out. (more…)