Investment Recap First Quarter 2011

As you’ve read by now, the 1st quarter of 2011 has been the best start to the stock market
in the last ten years. Winslow’s stocks continued their outperformance. In essence, the
very strong corporate earnings results and tremendous liquidity trumped the
tragedies and problems of the tsunami in Japan, the uprising in Egypt, and the
fighting in Libya.
We’ve mentioned many times that the markets can be counterintuitive (or at least hard to
figure out). One favorable trend that we identified several months ago, money
flowing out of bonds and into equities, is getting increasing media attention. Another
trend that we have discussed and benefited from is increased merger and acquisition
activity. Just in our hometown, JoAnn Stores was taken private last month, and Berkshire
Hathaway announced the purchase of Lubrizol two weeks ago. We expect both of these
trends to accelerate in the coming months. Down the road, we expect higher levels of
inflation and we are preparing for that eventuality. In the meantime, we continue to focus
on our stock-picking skills.