Reflections® is a monthly publication written by John Gilbert, CIO, GR-NEAM. Each issue focuses on current capital markets and investment topics. Our clients find it somewhat unique from many investment publications typically received.

	Reflections -- Sovereign Credit--The Return of the Deutschmark and Credit Default Swaps (size:0.23MB) Issue: July, 2010   Language: English Author:  John Gilbert Summary: The sovereign debt problem is just getting underway. Protecting oneself will prove for many to be a challenge.

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	Reflections -- 2.5 Forces of Contraction--a Procrustean Euro, Flats in China and Oil (size:0.32MB) Issue: June, 2010   Language: English Author:  John Gilbert Summary: Greece and China have reacquainted the capital markets with caution after a period of relative ebullience. The euro zones issues are chronic, while Chinas are self inflicted and more susceptible to reversal in the intermediate term.

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	Reflections -- That Which Goes Around (size:0.38MB) Issue: May, 2010   Language: English Author:  John Gilbert Summary: Greece may be the canary in the coal mine, as Thailand was in the Asian financial crisis of 1997. The conclusion may be ironic -- that the eurozone contributes to a bubble elsewhere, this time in Asia.

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	Reflections -- Good Emperor, Bad Emperor (size:0.41MB) Issue: April, 2010   Language: English Author:  John Gilbert Summary: The capital markets are going through a nervous period at the prospects for emerging markets -- but this is likely a pause that refreshes.

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	Reflections -- The Future Arrives, Before Time (size:0.36MB) Issue: March, 2010   Language: English Author:  John Gilbert Summary: Sovereign debt quality has come into question, which is no surprise itself. The timing is, however. Before the issue is fully discounted in securities prices, prices will go lower.

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	Reflections -- "V" is for Verisimilitude, Not Veracity (size:0.94MB) Issue: February, 2010   Language: English Author:  John Gilbert Summary: House price declines have reversed, for the time being. But they represent government intervention, not health. The governments struggle to offset the contractionary forces of deleveraging is titanic in its proportions but not the stuff of robust recoveries of the past.

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	Reflections -- History (size:0.99MB) Issue: January, 2010   Language: English Author:  John Gilbert Summary: Placing todays financial market valuations in historical perspective makes clear that there are few or no bargains around. Interest rates are unsustainably low, and equities have recovered to fair value. From such levels it appears that unfortunately the best returns over the typical horizons of one to five years are likely to come from manic market behavior rather than patience.

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	Reflections -- Two Difficult People Do Not Make a Good Marriage (size:0.31MB) Issue: December, 2009   Language: English Author:  John Gilbert Summary: Regulation of the banking system is about to change, but the central problem is rooted in banking as a business, and in the nature of regulatory behavior. In the long run, the outcome of the current reregulation will only be to modify the shape of future financial crises.

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	Reflections -- Financing the Deficit (size:0.68MB) Issue: October, 2009   Language: English Author:  John Gilbert Summary: The U.S. governments fiscal year ended in September, and the borrowing requirement that accompanied a $1.6 trillion deficit was in fact financed without noticeable upward pressure on interest rates. The reason, however, was that households made a large shift away from risky financial assets toward Treasury bonds as the markets deteriorated. Financing the expected $1.4 trillion deficit is another issue, however, without the stock market falling again.

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	Reflections -- Wakefulness 1, Rest 0 (size:0.40MB) Issue: September, 2009   Language: English Author:  John Gilbert Summary: Government intervention in the financial system was necessary and appropriate to prevent disaster. Continued intervention in the economy, however, distorts behavior and eventually stands to raise the governments borrowing requirement and accomplish little over time.

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	Reflections -- Inflation Quo Vadis (size:0.99MB) Issue: August, 2009   Language: English Author:  John Gilbert Summary: If inflation is to accelerate it is not immediate, but more likely to appear over three or four years time. Insurance against it, however, is today generally attractively priced and should be purchased.

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	Reflections -- The New Calvinists (size:0.57MB) Issue: July, 2009   Language: English Author:  John Gilbert Summary: The shock to households perception of their financial safety will make for higher savings ratesthe only question is how high. They could go surprisingly highafter all, everything else in this business cycle has come as a surprise.

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	Reflections -- House Prices: Overshooting On the Downside (size:1.01MB) Issue: June, 2009   Language: English Author:  John Gilbert Summary: Residential real estate behaves as a discrete asset class, and we measure the central tendency of its value. House prices were overvalued materially by that measure, and after recent declines are around their equilibrium value. Both the current level of housing inventory and history, suggest we are headed for undervaluation before it is over.

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	Reflections -- The Coming Sinophilia (size:0.81MB) Issue: May, 2009   Language: English Author:  John Gilbert Summary: The capital markets have begun to take notice of Chinas emerging signs of success in restarting lending, unlike the U.S. If Asia emerges as the worlds growth venue and economies in the west cannot overcome the retarding effects of weak financial systems, securities valuations there could be revalued, perhaps significantly.

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	Reflections -- The Stock Market and Valuation (size:0.48MB) Issue: April, 2009   Language: English Author:  John Gilbert Summary: Valuing the stock market has become more challenging as traditional measures have in some cases become unstable. A stable long term series, however, simple it may be, suggests that long term returns are likely to be considerably improved from current levelsbut it will take several years at a minimum.

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	Reflections - Investing with Leviathan (size:0.29MB) Issue: March, 2009   Language: English Author:  John Gilbert Summary: The scale and complexity of governments' responses to the financial crisis is very large. While it is early to tell, it may increase the role of policy anticipation in investment analysis. Participants in the Chinese stock market have behaved that way all along.

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	Reflections - How to Grow Poor Slowly (size:0.71MB) Issue: February, 2009   Language: English Author:  John Gilbert Summary: Treasury bond yields are unsustainably low. But Treasury Inflation Protected Securities, now out of favor, are quite attractive.

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	Reflections - A Fault Line in Economic History (size:0.34MB) Issue: January, 2009   Language: English Summary: The markets are making the bet that the historic government intervention in the financial system in the economy will fail. Markets are priced for persistent deflation even as the policy response is unprecedented in scale and innovation. The market consensus will likely be proved wrong over time.

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	Reflections - Avalanche Coming (size:0,20MB) Issue: December, 2008   Language: English Author:  John Gilbert Summary: The position of the dollar as the reference currency in the world financial system is in its sunset years, but the current borrowing program of the U.S. government may be hastening its demise.

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	Reflections -- Global Margin Call (size:0.89MB) Issue: November, 2008   Language: English Author:  John Gilbert Summary: The paroxysm in the capital markets is a worldwide margin call that drew in all risk assets. It puts an end to the simplistic idea of full economic decoupling that was popular until recently. The markets have been violent, but the margin call is about spent and in the near term markets are likely to recover.

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	Reflections -- Eating the Seed Corn (size:0.19MB) Issue: October, 2008   Language: English Summary: The measures taken by the U.S. government will work to stem the financial crisis, because the U.S. can substitute its balance sheet and putatively infinite borrowing capacity for private balance sheets that are stressed. This remedy will not be available, at least on such attractive terms, forever.

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	Reflections -- Decoupling Is Dead, Long Live Decoupling (size:0.31MB) Issue: September, 2008   Language: English Author:  John Gilbert Summary: The idea that global economic growth had become less integrated is now pretty well discredited. However, that does not mean that significant differences in growth rates will not persist as some countries have recessions while others, particularly in Asia, will continue to grow.

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	Reflections -- Longanimity and Investing Money (size:0.24MB) Issue: August, 2008   Language: English Author:  John Gilbert Summary: There is seldom gain without pain. In investing money, reverses create opportunity, but it is often far from obvious at the time.

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	Reflections -- The Fate of Financial Stocks, and the Role of Housing (size:0.27MB) Issue: July, 2008   Language: English Author:  John Gilbert Summary: Financial stocks have been extraordinarily poor performers. Their weakness has been so severe that it cannot persist indefinitely. Stabilization is likely to accompany early signs of a bottoming process in the housing market.

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	Reflections -- Oil (size:0.30MB) Issue: June, 2008   Language: English Author:  John Gilbert Summary: Oil prices may be going into a vertical ascent. The end of such episodes is always bad, but they can persist for longer than rationality would expect.

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	Reflections -- House Prices II (size:0.15MB) Issue: May, 2008   Language: English Summary: As the attention given the housing market has reached hysteria, one might conclude there is no bottom. In fact there is, and certain early signs have already emerged that suggest the shape of stabilization.

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	Reflections -- House Prices (size:0.47MB) Issue: April, 2008   Language: English Summary: Forecasting the depth of house price decline is guesswork. We look at it in various ways and conclude that all we can say at this point is that prices will continue to decline in the short term to clear the market. Judging the longer run, equilibrium level will remain a matter of debate.

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	Reflections -- The Problem of Prix Fixe (size:0.24MB) Issue: March, 2008   Language: English Author:  John Gilbert Summary: It is well known that price controls distort economic behavior. It also makes the job of an investor more difficult, since they may lengthen the time it takes for trends to revert to normal.

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	Reflections -- Recoupling and the Consensus (size:1.01MB) Issue: February, 2008   Language: English Summary: As virtual unanimity has developed that economic deterioration in the U.S. will not spread to other economies; it is an excellent time to examine a differing view.

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	Reflections -- When Crowds Set the Odds (size:0.22MB) Issue: January, 2008   Language: English Summary: The New England Patriots are the best team in football. Therefore, I should bet on the Patriots...A costly error.

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	Reflections -- Subprime Mortgages and Occam's Razor (size:0.17MB) Issue: December, 2007   Language: English Summary: Valuation of a security requires a clear understanding of how it produces earnings and cash flows. In the mortgage securities that are at the center of the current credit contraction, complexity itself played a role in widespread valuation errors.

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	Reflections - The Love Affair with Risk (size:0,30MB) Issue: November, 2007   Language: English Summary: Equity markets' recoveries from the lows of August have demonstrated the appetite for risk is alive and well, fed most recently by the expansionary response of central banks. The next manic phase in capital markets is taking shape.

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	Reflections -- The Inevitability Of Asset Bubbles (size:0.32MB) Issue: October, 2007   Language: English Author:  John Gilbert Summary: The debate over central bankers appropriate attitude toward moral hazard has been decided, at least for now, in favor of maintaining liquidity in the capital markets. The likelihood of another asset inflation, or bubble, is thus rising.

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	Reflections -- The Power of Mood (size:0.27MB) Issue: September, 2007   Language: English Author:  John Gilbert Summary: Just weeks ago it was supposed that liquidity in financial markets was infinite. Then liquidity evaporated and endangered even previously apparently sound borrowers. In the wreckage there will be opportunity someplace.

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	Reflections -- Valuation of Bonds and Stocks (size:0.35MB) Issue: August, 2007   Language: English Author:  John Gilbert Summary: Bond valuation is fairly straightforward. Valuing common stocks is more difficult, and while there are both good and fair ways of doing it, the usefulness of perhaps the most attractive method is constrained by the availability of data on individual firms.

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	Reflections - Bond Yields and the Intensity of Competition (size:0.20MB) Issue: July, 2007   Language: English Author:  John Gilbert Summary: Bond yields rose sharply in the last two months, driven by higher real yieldsnot by inflation expectations. This is part of the continuing normalization of the returns on fixed income, which are too low, and returns to firms in general.

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	Reflections - Private Equity and Competitive Advantage (size:0.17MB) Issue: June, 2007   Language: English Author:  John Gilbert Summary: Daimlers sale of Chrysler to a private equity buyer will certainly lead to financial engineering including cost reductions. Whether they can make sustainable improvement to a competitively disadvantaged business is another question.

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	Reflections - Yin and Yang: Growth and Error in an Era of Capital Abundance (size:0.33MB) Issue: May, 2007   Language: English Author:  John Gilbert Summary: Each investment fashion breaks on the beach, only to be followed by another. Despite the attention rightfully devoted to it at the moment, the U.S. housing finance problem is only one such problem -- count on more.

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	Reflections - Private Equity and the Public Markets (size:0.22MB) Issue: April, 2007   Language: English Author:  John Gilbert Summary: The tidal wave of money going to buyouts of public firms is unlikely to produce excellent returnsthere are too many people doing it. Venture capital is less fashionable, but whether or not that is creating investment opportunities for public markets opportunists is unclear.

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	Reflections - Housing: Quo Vadis (size:0.38MB) Issue: March, 2007   Language: English Author:  John Gilbert Summary: The share prices of housing and housing finance firms are going in opposite directions. The unusual characteristics of this cycle, and excess credit creation in particular, suggest which of the two is the better guess.

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	Reflections - President Chavez's Reminder (size:0.35MB) Issue: February, 2007   Language: English Author:  John Gilbert Summary: Emerging markets and commodities have been wonderful investments in the last three years. In many such investments, however, risk premiums have been too low. That is starting to change.

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	Reflections - Look East (size:0.38MB) Issue: January, 2007   Language: English Author:  John Gilbert Summary: The globalization of just about everything, and financial markets in particular, mean that the sources of capital market surprises may originate anywhere. Assets from bonds to copper appreciated together last year, and while growth of Asian economies explains a great deal about such apparently unlikely traveling companions, it also implies the source of future surprises.

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	Reflections - The Cost of Debt is Too Low (size:0.19MB) Issue: December, 2006   Language: English Author:  John Gilbert Summary: The low marginal cost of debt explains a lot of the behavior of the capital markets at the moment, and some of what will prove to have been errors.

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	Reflections - Regulation of Housing Finance and the Prospects for Risk Taking (size:0.24MB) Issue: November, 2006   Language: English Author:  John Gilbert Summary: An extended cycle of risk taking in everything from housing to emerging markets may be drawing to a close -- or not. It depends in part upon the behavior of financial regulators, which may affect how the Fed views the housing market.

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	Reflections - Noise and Time (size:0.31MB) Issue: October, 2006   Language: English Author:  John Gilbert Summary: It is natural for people to act upon the events of the moment and on their perceptions of the moment. But events and perceptions are transitory. The result is that much of what happens in the financial markets is random in the short termbut not in the long run.

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	Reflections - Equity Market Valuation and Earnings Risk (size:0.26MB) Issue: September, 2006   Language: English Author:  John Gilbert Summary: Earnings of commodity firms are unsustainable but are not a large enough contributor to the earnings of publicly held firms to materially affect the outlook for the equity market. If inflation is controlled, the outlook for equities remains relatively favorable.

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	Reflections - How High Interest Rates? (size:0.21MB) Issue: August, 2006   Language: English Author:  John Gilbert Summary: The markets have suddenly come to the realization that interest rates did not fully consider the risk of upward price pressure. Interest rates may overshoot on the upside, but bonds are now in the range of fair value.

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	Reflections - Expedia in Terra Incognita (size:0.22MB) Issue: July, 2006   Language: English Author:  John Gilbert Summary: Investing is both art and science. We discuss the art part -- in particular, why some firms earn higher profit margins than others, and why some are able to sustain high margins and others do not.

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	Reflections - The Importance of Barriers to Competition (size:0.19MB) Issue: June, 2006   Language: English Author:  John Gilbert Summary: Barriers to competition are the source of superior returns on capital. They tend also to attract assailants. Maintaining a competitively privileged position is growing more difficult, even for the best-positioned firms.

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	Reflections - The Most Dangerous Words (size:0.24MB) Issue: May, 2006   Language: English Author:  John Gilbert Summary: The vertical ascent of commodity prices is not only not unprecedented, but the history of commodity price cycles admonishes one that chasing such prices has a low probability of success over time.

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	Reflections - Returns on Businesses, and Returns on Securities--Time Matters (size:0.29MB) Issue: April, 2006   Language: English Author:  John Gilbert Summary: It takes time, but cash flows and the returns on capital they represent do emerge in securities values. It can take patience, but it happens. We believe this means a coming change in the capital markets is likely.

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	Reflections - All Rise (size:0.29MB) Issue: March, 2006   Language: English Author:  John Gilbert Summary: The simultaneous ascent of so many asset markets around the world is striking, and likely temporary. Such general enthusiasm is an environment in which pricing errors are probable.

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	Reflections - Cash Wins Over Time (size:0.20MB) Issue: February, 2006   Language: English Author:  John Gilbert Summary: The cash components of the return from equities continues to improve, and thus the premium one must pay for growth is falling, which is striking given the relatively good performance of corporate earnings over the last three years.

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	Reflections - Measuring the Price of Risk (size:0.46MB) Issue: January, 2006   Language: English Author:  John Gilbert Summary: We consider the signals implicit in the contest for AOL between Google and Microsoft, and what it says about the current preferences for risk.

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	Reflections - Preparing For Turbulence (size:0.49MB) Issue: December, 2005   Language: English Author:  John Gilbert Summary: The risky assets that are more distant in time from their last serious contraction are in many cases at speculative levels. The recent signs of slowing housing markets in the U.S. suggest that the best returns to aggressive risk taking are now past.

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	Reflections - Inflation and the Valuation of Financial Assets (size:0.18MB) Issue: November, 2005   Language: English Author:  John Gilbert Summary: Inflation is negative for financial assets, and is thus the high-stakes issue for investors. We expect the Federal Reserve to control inflation in this cycle. This piece considers the longer-term downside risks, if a future Fed is not as disciplined.

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	Reflections - Hurricane Katrina, Government Spending and Relative Returns of Bonds and Stocks (size:0.16MB) Issue: October, 2005   Language: English Author:  John Gilbert Summary: The distribution of future returns is not in bonds favor. Government's appetite for spending programs and the implications for money creation over time favor asset classes that contain some inflation hedge, which among financial assets means equities.

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	Reflections - Risk Management and Valuation Discipline (size:0.16MB) Issue: September, 2005   Language: English Author:  John Gilbert Summary: The recent report of the Counterparty Risk Management Policy Group II surveyed the state of risk management at seven years after Long Term Capital's collapse. Paradoxically, if only plausible risks are considered, as the report suggests, an investor ignores just the outcomes that can kill him.

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	Reflections - Competition for Total Return When There is Little Around (size:0.19MB) Issue: August, 2005   Language: English Author:  John Gilbert Summary: Among the principal asset classes, equities are more attractive than bonds or real estate at the moment. While this is like being MVP of an over-40 basketball league and thus damned with faint praise, we consider here the relative valuations.

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	Reflections - Debt Accumulation, Its Consequences and the Housing System (size:0.22MB) Issue: March, 2005   Language: English Author:  John Gilbert Summary: The upheaval at Fannie Mae and Freddie Mac are symptomatic of a more general issue--the tendency of financial market participants to go to excess. This is particularly true in a world in which the quantity of financial capital exceeds attractive opportunities, which we infer to be true from today's prices.

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	Reflections - Declining Liquidity and Risk Taking (size:0.19MB) Issue: February, 2005   Language: English Author:  John Gilbert Summary: The Federal Reserve is raising interest rates aggressively, and historically this is negative for risk taking.

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	Reflections - Elevated Prices Mean Unimpressive Returns (size:0.17MB) Issue: January, 2005   Language: English Author:  John Gilbert Summary: As 2005 begins, the capital markets offer very modest returns for taking much risk, and at such times the best idea is not to do so. We believe that the distribution of outcomes for our portfolios has a positive skew, unlike the markets in general.

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	Reflections - The Dollar and Returns to Risk Taking (size:0.52MB) Issue: December, 2004   Language: English Author:  John Gilbert Summary: Like rain at a sporting event, a weak currency is the great equalizer -- for a while. Eventually, however, something must give and we expect this time the outcome will be significantly higher interest rates, with negative implications for some of the principal capital markets¿ winners.

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	Reflections - The Bad Old Days (size:0.44MB) Issue: November, 2004   Language: English Author:  John Gilbert Summary: Liquidity in the financial system is so abundant that pockets of speculative behavior are becoming worrisome. As the investing public again defines risk as being left behind, the real risk of principal loss is rising.

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	Reflections - House Prices: Time To Rest (size:0.53MB) Issue: October, 2004   Language: English Author:  John Gilbert Summary: The idea of a housing "bubble," as the term is commonly used particularly after the technology stock disaster, remains hyperbole. But house prices have done all that they are entitled to do in capitalizing on low interest rates. We expect a two to five year period of decelerating house prices, bottoming around a zero rate of increase for the U.S. as a whole. Certain space-constrained areas will depreciate, but are unlikely to have a recessionary effect on the economy.

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	Reflections - The Poor Get Poorer: Airlines and Oil Prices May Intersect to Create an Opportunity in Certain Fixed Income Securities (size:0.10MB) Issue: September, 2004   Language: English Author:  John Gilbert Summary: The spike in jet fuel prices has only exacerbated the competitive problem of the legacy U.S. airline firms. The logical outcome is shrinkage of those companies and a release of some of their fleet of airplanes, which could create an opportunity at distressed prices in aircraft securities.

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	Reflections - Financial Markets as Psychology Laboratories (size:0.17MB) Issue: August, 2004   Language: English Author:  John Gilbert Summary: The financial markets' preference for risky assets has generally, and surprisingly, remained intact despite the approach of higher interest rates. The firms of stable businesses with established competitive advantages are relatively attractive.

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	Reflections - Real Interest Rates and Equity Returns (size:0.47MB) Issue: July, 2004   Language: English Author:  John Gilbert Summary: The relationship between real interest rates and the equity market suggests that either real interest rates remain too low, or the outlook for the equity market is weaker than most expect.

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	Reflections - Oil and Gas In an Era of Rising Risk Aversion (size:0.47MB) Issue: June, 2004   Language: English Author:  John Gilbert Summary: We are accustomed to ample oil and gas supplies after 20 years of increasing productivity in exploration, but recent drilling has under-responded to price increases. The implications are for higher oil prices, and a return to exploration risk-taking in the future.

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	Reflections - So, Prove That Trees Cannot Grow To The Sky--Valuing Google (size:0.11MB) Issue: May, 2004   Language: English Author:  John Gilbert Summary: The auction of Google shares is more a test of risk appetite than business skill. We discuss the valuation of a spectacular but immature business.

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	Reflections - Housing Prices Revisited: The Problems are in Housing Finance (size:0.96MB) Issue: April, 2004   Language: English Author:  John Gilbert Summary: House prices appreciated 8% in 2003, a rate that approaches the top of the historic band. While higher interest rates will likely reduce price increases significantly, perhaps to zero, housing is not generally a bubble as the media may suggest. Housing finance, however, is a product of capital markets where liquidity is currently enormous, and does show certain signs of real excess. It is there, and in housing markets they fund, that we will likely observe the worst hangovers.

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	Reflections - The Love Affair With Risk Favors Low-Priced Stocks; Risk Takings As an Explanation of Capital Markets Segmentation (size:0.08MB) Issue: March, 2004   Language: English Author:  John Gilbert Summary: Pricing of the same company's stock and its fixed income instruments suggest that risky equities, which are particularly likely to be the vehicle for aggressive risk taking, are overvalued.

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	Reflections - The Problems of Valuation When Most Assets are Expensive, and of Owning the Ones That are Very Expensive (size:0.08MB) Issue: February, 2004   Language: English Author:  John Gilbert Summary: One consequence of current abundant liquidity is that it is possible to look at two expensive assets and conclude that both are reasonably valued; more eclectic, weight-of-the-evidence measurements are necessary to judge riskiness of investments. We look at technology stocks and pick Yahoo to examine ranges of long-term returns from current levels.

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	Reflections - Ebullient Markets, An Outlook for Returns, and Occasional Pockets of Relative Value (size:0.11MB) Issue: January, 2004   Language: English Author:  John Gilbert Summary: A weight-of-the-evidence approach to appraising the attractiveness of financial assets suggests unimpressive long run capital markets returns once again; there are a handful of reasonable ideas, of which some pharmaceutical firms are examples.

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	Reflections - Cognitive Dissonance in Interest Rates (size:0.15MB) Issue: December, 2003   Language: English Author:  John Gilbert Summary: The current level of bond yields is inconsistent with the evidence from the economy. Bond yields are likely to rise.

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	Reflections - Risk Aversion, Risk Appetite and the Sharpe Ratio Myth (size:0.16MB) Issue: November, 2003   Language: English Author:  John Gilbert Summary: Investment criteria that force investors to take risk continually eventually get you in trouble.

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	Reflections - The Price of Confidence (size:0.08MB) Issue: October, 2003   Language: English Author:  John Gilbert Summary: The growth expected in the price of a security and its risk are inseparable. The greater the projection of growth, the farther into the future the payoff is delayed, and thus the greater the risk. Some typical ways of valuing securities thus draw a distinction where a distinction does not exist.

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	Reflections - Revisiting House Prices (size:0.11MB) Issue: September, 2003   Language: English Author:  John Gilbert Summary: We further explore the question of whether or not housing prices have risen at dangerous rates in recent periods. A related question is whether the recent rapid rise in interest rates when combined with the secular change in households¿ ability to draw equity from the value of their residences poses a threat to economic growth.

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	Reflections - The Return of Speculation in Financial Assets (size:0.07MB) Issue: August, 2003   Language: English Author:  John Gilbert Summary: The public is again expressing its appetite for risk taking in aggressive financial assets, which have risen rapidly on the vast quantity of liquidity sloshing around the financial system. The business characteristics of those firms have not improved from the last time the investing public expressed their asset preferences in this way, and we expect the outcome to be similar.

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	Reflections - Low Rates of Return and the Attractiveness of Financial Assets (size:0.08MB) Issue: July, 2003   Language: English Author:  John Gilbert Summary: Declining interest rates and capital markets returns affect the attractiveness of long-term assets in not one but two ways, both of which are negative.

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Reflections - Returns on Capital and Competitive Advantage: The Deflationary Effect of the Changing Balance of Commercial Power (size:0.06MB) Issue: June, 2003   Language: English Author:  John Gilbert Summary: Wal-Mart has harnessed the two principal forces of falling price levels of goods, technological change and international competition. The capital intensity of their business nonetheless restrains returns on capital. The implications for firms who have no clear competitive advantage are poor.

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	Reflections - Statistical Analysis, Investment Analysis and Risk (size:0.07MB) Issue: May, 2003   Language: English Author:  John Gilbert Summary: Aircraft financing provides a good example of risk and the need for identifying the right kind of investment analysis to apply in a particular situation.

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	Reflections - Cost of Capital and The Terms of Competition (size:0.07MB) Issue: April, 2003   Language: English Author:  John Gilbert Summary: Capital rationing by the markets affects not only the value of securities and equity in particular, but also a firm¿s competitive position itself.

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	Reflections - Financial Distress - The Power Industry and the Role of the Credit Rating Agencies (size:0.51MB) Issue: March, 2003   Language: English Author:  John Gilbert Summary: Many energy and power firms are struggling to stay alive by refinancing debt and selling assets; the credit rating agencies at this point become active agents in this process and not passive observers.

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	Reflections - Equity Prices and The Risk of Financial Distress (size:0.17MB) Issue: February, 2003   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Equity prices are a way to measure creditworthiness; practical measurement problems implied by the complex math of the calculations should not keep us from considering the capital structure in its entirety.

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	Reflections - Long Term Equity Returns Revert To The Mean (size:0.13MB) Issue: January, 2003   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The valuation error of the late 1990s has been corrected, but equity market return prospects remain relatively modest.

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Reflections - Opportunity in Utilities (size:0.08MB) Issue: November, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The over-investment in electrical generating capacity in the 1990s has caused a severe reaction in the valuation of utilities, which is finally an opportunity.

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Reflections - Housing Prices - Not Yet A Bubble (size:0.07MB) Issue: October, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Media's perception that housing prices are acting the same as tech stocks did three years ago, which is not (yet) true.

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Reflections - Cash Flow and Business Valuation: Cable Television as an Example (size:0.14MB) Issue: September, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Cash flow is indispensable for business valuation. Its abuse from time-to-time does not mean it should be discarded, but actually means quite the opposite--it should be used with care. We revisit the cable television business as an example.

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Reflections - Measuring Corporate Financial Reporting (size:0.06MB) Issue: July, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This article discusses measuring corporate financial reporting, specifically the use of a measure of gross cash flow, or "EBITDA."

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Reflections - Competitive Position and Financial Returns in the Pharmaceutical Business (size:0.07MB) Issue: April, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This issue discusses competitive position and financial returns in the Pharmaceutical business.

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Reflections - Accounting Issues and General Electric (size:0.06MB) Issue: March, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This article discusses the update of GR-NEAM's analysis of General Electric.

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Reflections - Harnessing The Laws of Probability (size:0.06MB) Issue: February, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** As it becomes easier to be wrong on individual investments, harnessing the laws of probability becomes even more important than before.

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Reflections - Cost of Capital (size:0.06MB) Issue: January, 2002   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Costs of capital can drive economic activity, rather than the other way around as is commonly supposed.

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Reflections - Capitlization Stocks (size:0.05MB) Issue: December, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The attractive valuations of smaller capitalization stocks has diminished.

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Reflections - Risk Asset Penalties (size:0.17MB) Issue: November, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Penalties to holders of risk assets looks to be peaking.

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Reflections - The options embedded in oil and gas stock prices imply little or no commodity risk premium, and given the possible disruption to energy supplies are therefore attractive. (size:0.07MB) Issue: October, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Reflections is a monthly publication on current investment topics. GR-NEAM has published it for clients and others for over ten years as a commentary on the capital markets and the investment of client's portfolios. It is intended to be relatively brief, and may be somewhat unique from many of the investment publications that are typically received.

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Reflections - Competition and the reversion of corporate profits to the mean (size:0.08MB) Issue: September, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This issue discusses competition and the reversion of corporate profits to the mean.

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Reflections - Calpine and Entergy (size:0.12MB) Issue: July, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Stockholders must distinguish carefully among businesses when they pay premiums for growth; sometimes it is the premium itself that fuels growth for a period of time (Calpine and Entergy as an example).

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Reflections - Technology Stocks (size:0.15MB) Issue: June, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Certain technology stocks remain fully valued or overvalued.

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Reflections - Equities and Relative Value Opportunities (size:0.12MB) Issue: May, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The lower prospective returns we expect from equities, mean that relative value opportunities increase in importance.

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Reflections - Telecomm Bust (size:0.05MB) Issue: April, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The telecom bust: returns to distressed debt may be disappointing.

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Reflections - General Electric (size:0.03MB) Issue: March, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** General Electric has emerged as the unchallenged leader by market capitalization among public companies.

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Reflections - Oil and Gas Prices (size:0.21MB) Issue: February, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The energy shock from natural gas prices acts as a tax increase that, like any other tax, depresses economic activity; oil and gas equities rarely sustain high returns over time, however.

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Reflections - Investments (size:0.15MB) Issue: January, 2001   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Returns on investments are very high for some stocks that have declined recently.

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Reflections - Equity Risk Premium (size:0.05MB) Issue: December, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The price-earnings-to-growth, or PEG ratio, and the risks of investing on that basis.

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Reflections - Damage to Shares of Internet Companies (size:0.23MB) Issue: November, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This issue discusses the performance of internet companies and their future prospects.

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Reflections - Affect of Rising Interest Rates on the Economy (size:0.04MB) Issue: October, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Credit underwriting standards have deteriorated.

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Reflections - Oil prices and the risk of financial accidents (size:0.21MB) Issue: September, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This issue discusses the relationship between money and the economy. Available as PDF only. Hard copies no longer available.

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Reflections - The role of "nonlinearity" in perceptions, and the implications for stock and bond valuations. (size:0.05MB) Issue: August, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** The role of "nonlinearity" in perceptions, and the implications for stock and bond valuations.

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Reflections - Foreign Investment (size:0.22MB) Issue: July, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** Foreign investment in the American capital markets, and foreign acquisitions of American investment managers.

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Reflections - Stock Market (size:0.05MB) Issue: June, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This issue discusses why stocks have stopped rising and other related topics.

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Reflections - Stock Market Risk (size:0.05MB) Issue: May, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This article deals with issues in the stock market and its risks.

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Reflections - Stock Market Risks (size:0.05MB) Issue: April, 2000   Language: English Author:  John Gilbert Summary: **Available as PDF only. Hard copies no longer available.** This article deals with issues in the stock market and its risks.

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