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Hedge Fund Star Klarman See No Gains For Stocks This Decade

November 3, 2010

Beware Discretionary Pension Returns This Earnings Season

October 28, 2010

Unlimited Wants? You Must Be Talking about Government

October 14, 2010

Beware of Survivor Bias in the Next New Thing

October 14, 2010

Fed no longer signals but states outright that low rates are here to stay

September 30, 2010

Obama Administration Rejects Tax Cut Extension on Investments

September 23, 2010

I know many of our clients are hoping for a reprieve on the expiration of the Bush tax cuts, but we just don’t see that happening. The Wall Street Journal reports that the White House has unilaterally rejected a Republican proposal to extend the Bush Tax cuts another two years. The Obama Administration instead proposes to extend cuts to working and middle-class Americans while eliminating the tax breaks for anyone earning over $250,000 per year. Under this scenario, taxes on capital gains will increase to 20%, taxes on dividends will more than double to as much as 39.6% and estate taxes will go up to 55% on estates over $1 million.

I hope we are wrong on this one, but even if the Republicans were to achieve a 1994-style victory in the house, it probably won’t result in repealing these tax increases. Does your investment plan include tax-advantaged strategies for maximizing wealth and passing it on to the next generation? Lyons Wealth Management works with individuals and institutions with $500,000 or more in investable assets and goals that include increasing income and reducing portfolio risk. Interested in learning more? Contact Alan Stevens at 407-951-8710.

You can read the story in full at

Perspective Over Panic, Please.

May 10, 2010

Theres no denying its been a tough start for equities in May. And for many investors, Im sure recent market activity is conjuring up feelings reminiscent of 2008. However, before panic sets in its always good to get perspective. Admittedly, weve seen a measurable pullback from the April peaks, but even after todays continued sell-off, year-to-date numbers for the major indices are nothing unusual for being four months into a year.  Understanding a 5%-10% correction is often typical when valuations become extended further helps keep recent market activity in context.




From April Peak





S&P 500



S&P 400



Russell 2K



GH Moderate (est.)



GH Core (est.)





 However, inevitably we become myopic in our views, especially when nerves are rattled.
We tend to see the markets as:

S&P 500: Feb 2010 through 5/7/2010.
and lose the true perspective:

S&P 500: Feb 2007 through 5/7/2010.

This isn’t to say some level of skepticism isn’t healthy. But, perspective is important. In 2008, we had essentially a perfect storm, credit freezing, equity markets tanking, a financial system on the brink, major companies like Bear Sterns, Lehman Brothers, FNMA, Freddie Mac, WaMu in trouble and defaulting, not to mention spiking unemployment, disappointing earnings. And the list goes on. In contrast 2010 brings solidly improving economic numbers. GDP at 3.2% annualized vs. -6.4% a year ago. Improvement in jobs (Nonfarm payrolls up 290K just today). Solid earnings reports from a number of companies. Signs of improvement in the housing market. Even AIG is posting profits to the tune of $1.45B. In fact the biggest overhang right now, aside from trade routing investigations, is the obsession with Greece and the sovereign debt contagion. To be sure, a sovereign default would not be a welcome event. But as is often the case, the issue is more a crisis in confidence than anything else. As European leaders continue to work through the issues, we expect investor confidence to be reclaimed.

When emotions run high, decision making abilities become impaired. Again, we tend to see the graph on the left, and not the one on the right. It is for this reason, we rely on our well developed strategies to guide us through these scenarios. The Good Harbor U.S. Tactical strategy is designed to avoid sustained bear markets. When the information we monitor (i.e. return momentum, yield curve dynamics and economic conditions) begins to suggest prolonged weakness, we will take a defensive posture. At the moment, we maintain our current allocation.

Best regards,

Neil Peplinski, CFA
Managing Partner
Cedar Capital Advisors, LLC
8770 W. Bryn Mawr, Suite 1300
Chicago, IL 60631
Office: 312-612-2245
Mobile: 847-309-9851
Fax: 630-982-1711