Window Glaziers and Letter Carriers

While condolences pour out to those hurt by Hurricane Sandy, it is estimated that $30-$50 billion of recovery funds may be requested to help New Englanders rebuild. Federal support is typical with natural disasters but rekindles the debate of whether rebuilding from a storm is “stimulative” to growth and therefore despite the extreme personal tragedy—an event with a silver economic lining. The same arguments can be made for fighting wars or keeping certain jobs afloat because, as they say, “it causes money to be spent and keeps people working.” This is something for investors to ponder as we face both natural and man-made disasters such as the so-called fiscal cliff…

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Alexander Hamilton’s Point

With debates over the role of government coursing through Europe and America, it is fitting to write a newsletter about our namesake, Alexander Hamilton. Arguably, Hamilton has moved beyond the shadows of other Founding Fathers to both infamy and prominence today, as developed economies struggle to find balance between government debt and the private sector. In this Newsletter we draw a parallel between America over 200 years ago and the problems facing Europe today—and foreshadow what may, once again, influence state and municipal finances here at home…

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“Please, sir, I want some more.” — Oliver Twist

When asked about the world economic situation, one of our mentors offered a plainspoken agricultural analogy by suggesting that global markets were due for a much needed “hard frost.” This phenomenon ensures nature’s vitality by occasionally eliminating all but the heartiest of vegetation. We find the frost analogy spot on regarding the financial world—especially if one looks over decades of “boom and bust.” In this Newsletter we attempt to put today’s conundrum of the simultaneous occurrence of a bull stock market and ongoing government imbalances in perspective. We look back at two historic cases where markets got a bit out of whack, concluding that healthy economic frosts do occur from time to time, but government intervention can skew the results…

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Follow the Leader…Sometimes

Tony Blair once noted, “The art of leadership is saying no…It is very easy to say yes.” His observation is entirely suitable to most any enterprise – especially the investment business. At Hamilton Point, we have learned that the discipline to say no, especially when uncomfortable with the company’s management, can make all the difference. Whether buying individual stocks and bonds generated by our original research, or the related selection of outside managers, the identification of solid management and enterprise culture is an inviolate step in Hamilton Point’s quality-focused process that helps us avoid certain investments that can be tempting if looked at only from a quantitative view…

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Robbing Peter and Suing Paul

A 1600’s phrase, “robbing Peter to pay Paul,” originated when taxes had to be paid to St. Paul’s Church in London and St. Peter’s in Rome. The current idiomatic definition is something like, “To solve a problem in a way that benefits one party, but makes another problem worse, and in so doing, creates no net gain.” This principle rings true as global events unfold regarding bailouts, rating agencies and Government policy. This Newsletter will outline some of the conflicts we see in today’s financial system and why we continue to avoid the sector…

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