Themes from 2005 — Dick Green of

Dick Green, President of, is an award-winning writer, picked this year by Smart Money as one of the top 30 market movers.

His Summary of 2005 highlights some key themes, and he then offers lessons from each.  (You might need a subscription for some articles, but you can find many of them here).

Dick draws some lessons from each theme.  I agree with the 2005 summary, and my own market outlook will also build on the 2005 events.

Here are the themes:

1) The U.S. economy proved extremely resilient to exogenous shocks.

2) Earnings growth was very strong and corporate balance sheets shined.

3) Value returned to the overall stock market despite rising interest rates.

4) Inflation remained surprisingly constrained.

5) Pervasive pessimism persisted throughout the year.

Dick (like me, Chicago-based) sees misplaced fears and pessimism, especially from "journalists based in the slow-growth Northeast.  He warns investors not to get caught up in the fashion of the moment or specific data points.

It is great advice.

Don’t Fret the Inverted Yield Curve

For those interested in the complete text of the David Malpass report I mentioned yesterday, you can find it here, along with a lot of other good reading in the section on markets.

Link: Don’t Fret the Inverted Yield Curve.

David is one of the world’s best economists. Following by David Malpass, Cheif Economist, Bear Stearns. Equities weakened on Tuesday and bond yields fell further, pushing longer-term yields below shorter-term yields. We disagree with the view that …

Dr. John Rutledge on the Inverted Yield Curve

John Rutledge’s experience combines a strong academic background and front-line investment experience.  His writing is authoritative and persuasive.  If you missed him on CNBC, you can read his explanation here.  My readers will find both the argument and the implications for stocks to be familiar.  The explanation of the need to understand "why" is especially good.

Link: Inverted Yield Curve.

I did a spot on CNBC Wake Up Call at 6:30 this morning; hope you were still sleeping. The topic was the inverted yield curve. Yesterday, the yield on the ten year Treasury dipped below the yield on the two year, reversing the "normal" relationship …