Volume 47 April 2019

4 ROE REPORTER | DKAM This is a long-winded explanation of why we think inflation isn’t an issue, interest rates have been normalized and stocks are attractive at these levels, and therefore why we feel excited to participate in the market. BlackRock manages $6 trillion --yes, trillion-- of institutional and retail assets and if anyone could take the pulse of investors and the market it would be them. Recently Larry Fink, BlackRock CEO, said “Many people thought we were going to be in a period of rising rates. We are not…With the market rally as large as it is, I would clearly tell you at this moment, most investors are underinvested…Despite where the markets are, we have yet to see money being put to work.” Investors are the most overweight cash since the financial crisis. It is easy to take money off the table when times are uncertain. It is a lot harder to put money back to work when the appropriate time comes. We’ve been putting our money to work. We are investing in companies with ROEs ranging from 18- 40% and we’re currently able to pay more than fair multiples for these companies. We see an attractive environment and think we’ll be able to continue to achieve good returns for our investors.