Quarterly Letter    

The economy continues to expand at a rate of 31/2% or better.

Nationwide unemployment is at 5.1%.

Inflation remains under control at about 2%. It has been at roughly 2% for eight years.

Short-term interest rates are in the 3% range, which is a fair level when inflation is at 2%.

Long-term rates are now in the 41/2 to 5% range, which is fair when inflation is at 2%.

Long-term mortgage rates are now in the 51/2% range which is a fair level when inflation is at 2%.

We believe stocks are priced to return 8%-9%, which is fair given all of the above.

Folks - these are the economic numbers we have been trying to attain for 25 years!

I don't know why so many reasonably intelligent people refuse to accept and enjoy them!

— Ron Muhlenkamp

The information in this article represents the opinions of the Fund Manager, is subject to change and any forecasts cannot be guaranteed. Copies of past newsletters are available on our website at www.muhlenkamp.com.