We mark a series of notable market anniversaries this month.  Most immediately, March 9th was the one-year anniversary of the low point of the financial crisis market downturn.  The S&P 500 closed at 677 on March 9, 2009, from which low it has risen nearly 70%.  This March also marks the ten-year anniversary of the end of the last great bull market. 

 

The S&P 500 peaked at 1,527 on March 23, 2000 and sits near 1,150 today (dividends have offset some of that decline).  Even more sobering is the Nasdaq's (a technology-heavy index) enduring decline.  The Nasdaq composite index peaked at 5,046 in March, 2000, and although it has doubled from its lows at the end of the tech bust, it still sits more than 50% below its peak.  Prices and-more importantly-valuations reached an all time high that day, a sin for which investors have been paying the penalty for ten tough years.  Both the short-term exuberance of pulling back from the brink over the last year and the grinding losses of the last decade point to one constant central to our thinking: valuation matters.

This month, in addition to Buffet's annual shareholder letter, we bring you a smattering of interesting pieces. Also, while acknowledging the real pain caused by the financial downturn, maybe now, a year later, we can begin to put it in perspective and laugh a little.  In that spirit, to the readers who refer a friend, colleague or family member to Bristlecone, we'll send out as our gift Collapse: the Commemorative Game of the Financial Crisis (http://bespokeinvest.typepad.com/bespoke/).