Macroeconomic analysis is not a primary driver of our investment process, but it does play a role. To our way of thinking, there are companies that do well and some do not in every economic environment. When the economy in on the up and up, more companies are doing well and few companies struggle. In this environment, one should have a bullish tilt as “rising tides lift all boats” and should a surprise come along, it is more likely to be good than bad. When the economy is on the down and out, fewer companies do well and it becomes more difficult to find bullish investments. In this environment, surprises come fast and furious and sometimes it seems like they are always negative. At the same time, this environment provides an opportunity to buy quality assets at beaten down prices.
