All those pundits that said we need to get a debt deal in order to “stabilize” the markets are certainly eating their words. The last few days have been horrendous for the stock market and today is no exception, with the market being down over 450 points so far. As we stated in our last update, the debt ceiling was a minor consideration compared to what is happening in Europe. As you might recall from our March newsletter, we detailed our concerns about Europe. The contagion from Greece has not been contained and is spreading faster than the flu. We expect more volatility in the days ahead.

Although some clients may be more nervous than others, a key point for all to keep in mind is that the time to prepare for winter is during the fall harvest, not during a winter blizzard. We did our harvesting a few months back by reducing your exposure to the stock market. At some point, the ice will start to melt away and it will be time to move money back into the stock market. Every stock market downturn has different causes, but one thing is constant – human emotion. That emotion is showing up in these current downswings in the market.

Most of your portfolios have what we believe is a substantial amount of “dry powder”. In the past couple of months, our decisions were based on the amount of risk and reward we saw in the market, with more risk than reward. Our decisions going forward will be based upon that same principal, and however hard, we are confident the right decisions will come through with our disciplined approach. Although we do not hope for a major fall in the equity markets, we will be sure to take advantage of our cash position and capitalize on unique opportunities when the time is right. A lesson we learned many years ago still remains intact: When the market is going up, any cash is too much cash. When the market is going down, you never have enough cash.

At times like this, we may be more accessible after work hours due to other client calls, investment meetings and conference calls with analysts on the street. Please don’t hesitate to call us here at THOR or on our cell phones at any time if you need to talk with us.

Sincerely,

Your THOR Team