2011 cabot investor conference - 2011 year in review
DESCRIPTION
Cabot Money Management 2011 Year in ReviewTRANSCRIPT
CABOT’S 22ND ANNUAL INVESTMENT CONFERENCE & LUNCHEON
Friday, September 23, 2011
CABOT’S YEAR IN REVIEWPresented by: Dennis Wassung, CFA, Portfolio Manager
2011 BY ASSET CLASS
2011 thru 9/22/11
GOLD
BONDS
REITS
NASDAQ
COM
MODIT
IES
S&P 5
00
MID
CAPS
FOREI
GN DEV
ELOPED
SMALL
CAPS
EMER
GING M
ARKETS
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2011 BY COUNTRY: TOP & BOTTOM 5
2011 thru 9/22/11
THAILAND
SOUTH AFRICA
UNITED STATES
TURKEY
SOUTH KOREA
ARGENTINA
CZECH REPUBLIC
FRANCE
HUNGARY
EGYPT
-40% -35% -30% -25% -20% -15% -10% -5% 0%
2011 BY SECTOR
2011 thru 9/22/11
UTILI
TIES
CONSUM
ER S
TAPLE
S
HEALT
H CARE
INFO
RMATI
ON T
ECH
CONSUM
ER D
ISCR
TELE
COM
SVC.
ENER
GY
INDUSTR
IALS
MATE
RIALS
FINANCIA
LS-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
12/3
1/20
10
1/11
/201
1
1/22
/201
1
2/2/
2011
2/13
/201
1
2/24
/201
1
3/7/
2011
3/18
/201
1
3/29
/201
1
4/9/
2011
4/20
/201
1
5/1/
2011
5/12
/201
1
5/23
/201
1
6/3/
2011
6/14
/201
1
6/25
/201
1
7/6/
2011
7/17
/201
1
7/28
/201
1
8/8/
2011
8/19
/201
1
8/30
/201
1
9/10
/201
1
9/21
/201
1-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
S&P 500
2011 Market EventsDebt
Ceiling Debacle
S&P Downgrad
es U.S.
Weak Economic Data
2011 thru 9/22/11
12/3
1/20
10
1/11
/201
1
1/22
/201
1
2/2/
2011
2/13
/201
1
2/24
/201
1
3/7/
2011
3/18
/201
1
3/29
/201
1
4/9/
2011
4/20
/201
1
5/1/
2011
5/12
/201
1
5/23
/201
1
6/3/
2011
6/14
/201
1
6/25
/201
1
7/6/
2011
7/17
/201
1
7/28
/201
1
8/8/
2011
8/19
/201
1
8/30
/201
1
9/10
/201
1
9/21
/201
1-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
S&P 500
2011 Market EventsDebt
Ceiling Debacle
S&P Downgrad
es U.S.
Weak Economic Data
2011 thru 9/22/11
?What’s Next?
10-YEAR TREASURY YIELD
12/3
1/20
07
3/31
/200
8
7/1/
2008
10/1
/200
8
1/1/
2009
4/1/
2009
7/1/
2009
10/1
/200
9
1/1/
2010
4/1/
2010
7/1/
2010
10/1
/201
0
1/1/
2011
4/1/
2011
7/1/
2011
0%
0.5%
1%
1.5%
2%
2.5%
3%
3.5%
4%
4.5%
Yield on 10-year U.S. Treasury
The 10-Year Treasury yield is now near 60-year
lows!
12/31/07 thru 9/16/11
A YEAR AGO…STOCKS VS. BONDS
2010 thru 9/16/10
12/3
1/20
09
1/11
/201
0
1/22
/201
0
2/2/
2010
2/13
/201
0
2/24
/201
0
3/7/
2010
3/18
/201
0
3/29
/201
0
4/9/
2010
4/20
/201
0
5/1/
2010
5/12
/201
0
5/23
/201
0
6/3/
2010
6/14
/201
0
6/25
/201
0
7/6/
2010
7/17
/201
0
7/28
/201
0
8/8/
2010
8/19
/201
0
8/30
/201
0
9/10
/201
0-10%
-5%
0%
5%
10%
15%
Stocks Bonds
FULL YEAR 2010STOCKS VS. BONDS
2010
12/3
1/20
09
1/14
/201
0
1/28
/201
0
2/11
/201
0
2/25
/201
0
3/11
/201
0
3/25
/201
0
4/8/
2010
4/22
/201
0
5/6/
2010
5/20
/201
0
6/3/
2010
6/17
/201
0
7/1/
2010
7/15
/201
0
7/29
/201
0
8/12
/201
0
8/26
/201
0
9/9/
2010
9/23
/201
0
10/7
/201
0
10/2
1/20
10
11/4
/201
0
11/1
8/20
10
12/2
/201
0
12/1
6/20
10
12/3
0/20
10-10%
-5%
0%
5%
10%
15%
20%
Stocks Bonds
EXTENDED TO TODAY…STOCKS VS. BONDS
12/31/09 thru 9/17/11
12/3
1/20
09
3/3/
2010
5/3/
2010
7/3/
2010
9/3/
2010
11/3
/201
0
1/3/
2011
3/3/
2011
5/3/
2011
7/3/
2011
9/3/
2011
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Stocks Bonds
EQUITY MARKETS HAVE LONG-TERM VALUE:Dividend Yield Is Higher Than 10-Year Treasury
Yield
1998-Current
7/3/
1998
1/3/
1999
7/3/
1999
1/3/
2000
7/3/
2000
1/3/
2001
7/3/
2001
1/3/
2002
7/3/
2002
1/3/
2003
7/3/
2003
1/3/
2004
7/3/
2004
1/3/
2005
7/3/
2005
1/3/
2006
7/3/
2006
1/3/
2007
7/3/
2007
1/3/
2008
7/3/
2008
1/3/
2009
7/3/
2009
1/3/
2010
7/3/
2010
1/3/
2011
7/3/
2011
0%
1%
2%
3%
4%
5%
6%
7%
8%
S&P 500 Dividend Yield 10-Year Treasury Yield
EQUITY MARKETS HAVE LONG-TERM VALUE:Stocks Are “Cheap”
1976-Current
EQUITY MARKETS HAVE LONG-TERM VALUE:10-Year Rolling Returns Favor Stocks
Dec-
10
Dec-
15
Dec-
20
Dec-
25
Dec-
30
Dec-
35
Dec-
40
Dec-
45
Dec-
50
Dec-
55
Dec-
60
Dec-
65
Dec-
70
Dec-
75
Dec-
80
Dec-
85
Dec-
90
Dec-
95
Dec-
00
Dec-
05
Dec-
10
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Rolling 10-Year Annualized Total Return of the Dow Jones Industrial Average (1910 - Present)
ONE OF THE CLASSIC“STOCK MARKET RULES”
“The time to buy is when there is blood in the streets…
…even if the blood is your own.”
–Baron Rothschild, 18th Century