Well, we just finished the best month in a year.  The Dow industrials posted a gain of 691.92 points, or 7.1%, for July.  Encouraging earnings reports have supported the market.  So, what is our outlook for the rest of the year?  I think I’ll answer with a quote from one of our firm’s favorite Fund managers, Christopher C. Davis.

While we, like any money manger, would like to know the answers to these questions, the reality is that nobody can consistently predict the ultimate level or even the direction of market indexes and interest rates over very short time horizons.  We have a longer-term view that select equities should produce satisfactory returns over the next decade, especially versus cash and bonds, based on our long-range expectation of underlying profit growth on the one hand, and today’s relativlely reasonable valuations on the other hand.  The key to outperforming in the long run, in our experience, is to select durable businesses with favorable compounding characteristics taht can be purchased at reasonable valuations and held for the long term.