The Big Picture For The Week of September 11, 2005

Last week's strength in the market was a little surprising. Nothing had changed my near term outlook.

There was an interesting article in Barron's written by Sy Harding that points out the poor track record for the second year of presidential terms. I had heard about this before but had forgotten about it. I tend to buy into these types of things. When history repeats itself so often I pay attention. Another reason this interests me is that I been forming a negative opinion for 2006 over the last few months.

Barry Ritholtz wrote a piece where he opined that the aftermath from Katrina will be worse than what is now expected or being priced in to equity prices.

I touched on this during the week in my CNBC Asia interview. I said that at this point (Wednesday night) we don't yet know if the loss of commerce will outweigh the lift from the rebuild. Barry is probably right, he is usually is, but I don't necessarily feel they need to think I have this all figured out just yet. I know, for the most part, what action I will take if things head south regardless of the reason.

To harp on something; I view knowing what actions you might take should things change as being forward looking. There is a sports analogy here, I think. Larry Bird was always thinking two plays ahead on the court. I try to think two plays ahead in client portfolios.