Micro Versus Macro

While we are not agnostic to the macro, we remain primarily focused on the micro. We spend our time studying businesses, not glued to CNBC. The difficulty in focusing on the macro can be illustrated by the following example. In January of 2011, many were calling for 2012 to be the year the EU broke apart. Instead, the European bond markets celebrated their largest gains ever. Portuguese bonds returned 57 percent, Italian debt rose 21 percent, Irish sovereign securities returned 29 percent and even Spanish bonds rose 6.2 percent.