As you read this letter, we are most likely in the midst of our move to Raymond James’ NorthPark location at the intersection of Abernathy Road and GA-400, near Perimeter Mall. We realize the move will make it harder for some of you to come visit us…and easier for others. Carrie and I will have a much easier drive to work, as the new location is only 3.3 miles from our house. However, Catherine will have a longer commute from Powder Springs.
We hope you will come visit and have lunch with us at our new location soon. Our phone number will remain the same, however future mail should be sent to the following address:
Malcolm Tarver
Raymond James
1100 Abernathy Road NE
Building 500 – Suite 1850
Atlanta, GA 30328
John Templeton famously said, "Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria." One analyst has divided a bull market into six phases 1) Rebuilding, 2) Guarded Optimism, 3) Enthusiasm, 4) Exuberance, 5) Unreality, and 6) Correction. Our analysts believe we are currently in Phase 2: "Guarded Optimism". As Jeff Saut writes,"If correct, it would fit with our supposition that we have - Enthusiasm, Exuberance and Unreality - before the "Correction" arrives. That would also foot with our premise that there is likely another eight to nine years left in the secular bull market."1
So, we do not believe the market is overvalued for several reasons:
We, as well as Raymond James analysts, share your frustration with the fact that, since the OPEC production cut agreement, oil prices have still been unable to stay above $50, becoming seemingly disconnected with the fundamentals of supply and demand.
However, Raymond James analysts expect even more significant drawdowns in oil supply in the 3rd and 4thquarters of this year. OPEC's decision in May extended production cuts for an additional nine months, through March 2018. As our energy analysts write, "This extension substantially tightens (i.e. makes more bullish) the global supply/demand equation in the second half of 2017 and start of 2018.";3 Therefore, we continue to believe energy stocks are a tremendous buying opportunity.
In conclusion, we believe we are only in phase 2 of a six-phase bull market, that supply/demand fundamentals should produce higher oil prices in the 3rd and 4th quarters, and…most importantly…please come visit us at our new location!
Sincerely,
Malcolm C. Tarver, III
Senior Vice President, Investments
Certified Investment Management Analyst ®
1Gleanings, Jeff Saut, June 23, 2017
2Blue Chip Growth, Louis Navellier, June 2017
3Energy Stat of the Week, Raymond James, May 30, 2017
Past performance does not guarantee future results and there is no assurance that the objectives will be met. Investing involves risk and you may incur a profit or a loss. The information and opinions provided have been obtained from sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed. Expressions of opinion are as of this date and are subject to change without notice. The opinions expressed are provided solely for informational purposes and not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Long-term investing does not insure a profitable outcome. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. There are additional risks associated with investing in an individual sector, including limited diversification. The S&P 500 is an unmanaged index of 500 widely held stocks and is generally considered representative of the US equity market. It is not possible to invest directly in an index. Investment Management Consultants Association (IMCA®) is the owner of the certification marks "CIMA®" and "Certified Investment Management Analyst®". Use of CIMA® or Certified Investment Management Analyst® signifies that the user has successfully completed IMCA's initial and ongoing credentialing requirements for investment management consultants. Investments in the energy sector are not suitable for all investors. Further information regarding these investments is available from your financial advisor.
