In our last issue of Perspectives, amid the abject gloom of the first quarter, we offered the following words of encouragement from the great John Templeton: “Bull Markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” The meaningful second quarter market rebound suggests that the extreme pessimism has faded. Although last month’s pullback caused renewed apprehension, it had been widely anticipated after such a rapid advance. Whether this “baby bull” continues to grow on skepticism remains to be seen, as recent data have raised doubts about the pace of economic recovery. The investment profession can be humbling, and it is in this spirit we maintain our constructive outlook for equities despite the dismal state of the economy and the sobering voices of credible skeptics.

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