This month, Time magazine published its 5th annual list of the leaders, thinkers, heroes, artists and scientists who were most influential in 2008.

You can scroll through one page articles on each nominee on the web site. I find it fascinating to learn updates on some of the inspirational doers in the world today, but an added interest is that other leaders and celebrities have written the article on each person: Oprah writes on Michelle Obama, Bono on George Clooney's work in Darfur, etc. This way we can learn about two interesting people in each article.   more »

Fellow portfolio manager, John Hussman of Hussman funds is one of my favourite market commentators. His weekly market comment is especially on point this week: "Comfortable with uncertainty."

Although Hussman's methodology is different than my firms, our stated investment objectives are the same: to outperform market returns over the complete market cycle, with less down market losses than a passive strategy. (As modest as this goal may sound, these are fighting words for the long-always crowd.)

Frequently as market analysts we are asked to forecast what market prices will do next. At my firm, we continually try to point out that forecasting is narrative fallacy of the first order. We can't possibly predict what markets will do. In fact as I frequently tell people, any time you hear a pundit seriously proclaiming what comes next—Run away!

Prudent risk management is all about assessing probabilities and implementing rules that will respond in a disciplined way to whatever market conditions present. Hussman and (F. Scott Fitzgerald) explain it this way...   more »

After a strong bear market rally since March 9, world markets are looking pretty overbought. Not that they cannot continue overbought a while longer, but the probability of the next downside test is growing daily. Much of the recent fervour has been optimism about carefully dressed bank earnings which seem better than had been expected for Q1. But credit issues still loom and lasting health has not yet been restored to our financial institutions.

Lest anyone forget, so far we are still in a cyclical bear market, within a long secular bear market, and so defensive action is still key. Peeling off profits from big rallies is always prudent action in this type of market cycle. When markets are able to punch through the overhead of their 200 day moving averages with sufficient force, it will be a bullish sign for the next leg up. But in the meantime, we can't go broke taking profits and after an incredibly volatile first quarter 2009, we are grateful to take them...   more »