Author: Gerry Sparrow, Sparrow Capital
In the first quarter of 2012, equity markets advanced in most parts of the world. The equity markets in Europe, Asia, North and South America all advanced in single digits with the United States Dow Jones Industrial Average up +8%.
The are also signs of improvement in housing, automotive and clothing industries. Consumer spending accounts for two-thirds of U.S. Gross Domestic Product or GDP and this is an area we are watching very closely. The data on these sectors is released each week and appears as of this writing to be doing quite well. This also being an election year gives us optimism for the markets in 2012.
Our investment portfolio finished in the plus column for the first quarter of 2012. Looking forward what we need to see is positive momentum in first quarter earnings reports for our investments and other publicly traded companies.
Our investment approach is to buy companies with consistent earning power, high return-on-equity while employing little or no long-term debt and to purchase at reasonable prices with a high margin of safety.