Our holdings reflect the change in market leadership. We have decreased our holdings in homebuilders, financials, and consumer cyclicals, and have increased our holdings in capital goods and technology. For instance, we bought Cisco ( CSCO) and Oracle (ORCL). It's been a long time since you could buy these stocks so cheap. We do a seminar twice a year, and people had been asking us, "When do you think technology will come back?" The answer we gave them was, "Not until you quit asking." April 2007 was the first time nobody asked.
Will we have a recession? From an investment standpoint, we won't know until it's too late to do anything about it. And from an investment standpoint, it probably doesn't matter. There's going to be a long-term workout of these credit instruments, measured in months or quarters. If we're right that the investment climate is good and the business cycle continues, we are now once again at the beginning of a business-investment cycle, giving us opportunities we haven't seen in six, seven years.
Last updated February 06 2008: 10:16 AM ET