Well the first thing ya’ know old Jed’s a millionaire!

As broad stock market averages and indexes in the US establish new highs, there is a great deal of debate as to whether these current elevated prices represent just another “bubble.” Only time will tell. But, as I review the landscape, I have a couple of comforting observations. The first is that, while the Standard & Poor’s 500 Stock Index and the Dow Jones Industrial Average are indeed hitting news highs, the reality is that they are not that much above where they were ten years ago! Corporate profitability in the meantime is much higher. Hence, there is greater earnings support for existing stock price levels.

The second observation is the tremendous energy discoveries made in the US in the past few years. This is new found, and profound, wealth and it has tremendous repercussions for economic development. Recall the 1960’s sitcom The Beverly Hillbillies. In the theme song ballad it was pointed out that one day in the life of the featured character, poor farmer and family head Jed Clampett, “… he was shootin’ at some food, when up from the ground came a bubblin’ crude. Oil, that is. Black Gold. Texas Tea. Well, the first thing ya’ know old Jed’s a millionaire.”

Wealth from this one industry in this country has gone up significantly of late and we cannot lose sight of that.

All questions and comments are welcomed.

Bob Bilkie, CFA