Front Street Capital

Commentary: Craig Porter

Commentary December 31, 2009

Craig Porter - Q4 2009 Commentary

The majority of global equity markets ended the year with significant gains. Most surged off the excessively low valuations reached earlier in the year, fueled by low rates and cheap money. Although the worst appeared to be behind us, and many countries saw increasing manufacturing numbers, all was not well in certain pockets of the world. Late in the year Dubai announced they would not be able to make debt repayments only to be bailed out by one of their Arab Emirate brothers.

Commentary September 30, 2009

Craig Porter - Q3 2009 Commentary

Global stock markets continued to recover in the third quarter, bouncing off the recessionary lows seen earlier this year. The S&P/TSX index was up a further 9.8% in the third quarter, bringing its year-to-date performance to up 27%. On a positive note, we have some seen some breadth in the recovery with half of the sub sectors on the S&P/TSX up over 25% YTD. The second quarter earnings period was quite strong with many companies easily surpassing lowered expectations. However, most of the gains in profitability came from cost cutting and rationalizations.

Commentary June 30, 2009

Craig Porter - Q2 2009 Commentary

Resource sectors led the TSX higher this quarter with the index up 19%. Investors started to deploy some of the massive amounts of cash built up over the past year, on the feeling that the markets were past their bottoms. As we go through the summer, a notoriously slow period, investors will need to see a few factors if the rally is to continue. On the economic front, we’ll need to see signs of actual growth, not just a slowing in the rate of decline. On the corporate front, as we go into earnings season, any results above expectations will provide a base for the market.

Commentary March 31, 2009

Craig Porter - Q1 2009 Commentary

The year started off the same way that 2008 ended, as job losses continued to pile up and with daily announcements of bleak economic news. Global equity markets dropped a further 15-20%, adding to the losses of the previous year. In the auto sector, Chrysler and Ford were given deadlines to slash cost and sort out their balance sheets issues before they are forced into bankruptcy protection. Fears of the tens of thousands of jobs that could be lost sent investors running for the exits. Then as we entered March a more optimistic tone took over the market.

Commentary January 29, 2009

Q4 2008 Commentary

The fourth quarter of 2008 was a dreadful period for global equity returns. In North America the TSX was down 24% and the Dow was off 20% this quarter alone. Slowing economies, massive job cuts and government bailouts on a global basis all conspired to cause equity markets to drop and consumer confidence to plummet. Corporations have been very quick to respond to the economic downturn. With the ever tightening credit markets, producing companies have been quick to shut down unprofitable operations in an attempt to limit losses.

Commentary October 31, 2008

CRAIG PORTER - Q3 2008 COMMENTARY

Equity markets were extremely volatile in the quarter, as the credit crisis and collapsing housing markets in the U.S. started to spread around the world. Credit markets froze up to a point where lending stopped and banks refused to lend to each other, out of fears of counterparty risk. Lehman Brothers went bankrupt and other major investment banks were forced to merge or were nationalized to ensure survival. Markets were falling at a pace not seen since 1929. Dramatic action was required, and that’s what we saw from governments around the world.