January 2009 Bristlecone Monthly News Digest   Greetings! Since our last email a month ago, the market has continued to recover sharply: through last Friday, and from the low on March 9, the S&P 500 index was up about 37%. Pundits are debating whether this is the end of the bear market or a "suckers' rally." As you would expect, we remain agnostic about the short term direction of the market. We continue to find attractive investments for your Large Cap Value portfolio, and view attempts to time the market as futile to long-term investors.   We hope you will enjoy our latest article selection. Berkshire Hathaway Annual Meeting Woodstock for Capitalists, aka Berkshire Hathaway's Annual Meeting, was held May 2.  These meetings are famous for a reason, they offer hours of insights by two of the greatest investment minds, Warren Buffett and Charlie Munger. Our own Josh Graybill made the pilgrimage so you can always email or call him. Andrew Ross Sorkin from the New York Times was one of the questioners: Read the Article Valuing Equities in an Economic Crisis This paper by Ben Inker, director of asset allocation at GMO, discusses how the current economic crisis caused panicked investors to push US stocks below their fair value for the first time in over a decade, and then offers a more rational approach to determining the fair value of the stock market.  See particularly: 1) Powerful examples of mean reversion, a key driver to our thinking about investments; 2) Valuable perspective on the long-term stability of the economy and stock dividends. Accessing GMO's Research paper requires a guest registration. If you are not already registered, please click here. Read the Article Stock Pros Who Survived the Depression A great article from SmartMoney featuring Irving Kahn, Walter Schloss and Seth Glickenhaus. All of them are over 90 and not only survived the Great Depression, but took critical investment lessons from that period to generate decades-long records of investment success.  Highlights include the importance of skepticism, curiosity, humility, and perspective.  These lifelong investors offer an important reminder that recognizing the natural business cycle gives investors a big leg up. Read the Article Wal-Mart: A Case Study of the Dangers of Overpaying for Growth This article by Ravi Nagarajan offers a great illustration of the often profound differences between business value and stock price.  Despite a decade of solid growth in sales (11% annually), dividends (17%) and earnings (10%), investors who bought Wal-Mart a decade ago probably lost money because of the high expectations built into the stock price. A classic mistake investors make is confusing a great business (which Wal-Mart surely was in 1999 and remains today) with a great stock investment.  As value investors, and investors in Wal-Mart after its fall from grace, we feel that the probabilities of investment success are greatest when we are able to purchase above-average businesses at a significant discount to a conservative estimate of their fair market value. Read the article Morningstar Reviews 529 Plans One worry facing many parents is financing the growing cost of college tuition.  One arrow in the quiver is the 529 plan, which offers the chance to build savings for college on a tax-free basis (within certain guidelines).  Morningstar just came out with its annual assessment of the various state plans.  Read the article Do you have friends who might enjoy this newsletter? Click here to forward it. The information will only be used to send this email on your behalf and will not be used for any other purpose.  May 2009 Visit our website. THE FIRM NEWS/ARTICLES PEOPLE PHILOSOPHY HOW TO INVEST   Did someone forward you this message? Opt in to receive our emails: View our Archive Copyright © 2004-2009: Bristlecone Value Partners, LLC.; All rights reserved. This email is provided for general purposes only and is not intended to provide specific financial, accounting, or legal advice. Any mention of third party firms  or individuals is not, and should not be construed, as a recommendation, endorsement or sponsorship by Bristlecone Value Partners. Experiences expressed are not a guarantee of future performance or success and may not be representative of your experience. All investments are subject to risk. To safeguard your privacy, do not include account numbers, social security and tax ID numbers, passwords or other non-public information when replying to this email. Read more about Bristlecone's Privacy Policy.  All email sent to or from Bristlecone Value Partners corporate email system may be retained, monitored and/or reviewed by someone other than the recipient.