Thoughts from the Frontline

Investing: Faith Versus History

By John Mauldin

April 25, 2003

The Lackluster Economy
Faith versus History
Secular Bear Markets
Blind Dogs and Janus Managers
Phony Analysis
Have We Seen the Bottom?
What’s in a Name?

This week we briefly look at a few choice economic insights, and then I once again will close with a portion of my book-in-progress about how to successfully invest in secular bear markets. Despite some non-writing business issues which are eating up a lot of work time, I am making good progress (finally) on the book, which I hope to have finished in less than a month and with some hard work on the part of my publisher available in bookstores and over the internet this summer. My intention was to call the book Absolute Returns, but it seems someone has just beaten me to the title. At the end of this letter, I will initiate a contest to help me find a new title.

The Lackluster Economy

The Fed issues something called the "Beige Book" each month, describing economic activity around the country. Yesterday's edition proclaimed the economy to be "lackluster." Dennis Gartman summed it up best:

"The Fed's Beige Book yesterday offered little if anything that shall help us define the nation's future economic prospects. Perhaps the most important passage from the 'book' said simply that:

'...the pace of economic activity…

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