Quarterly Letter 
by Ron Muhlenkamp   
Economic trends of the past year continue. The economy is growing nicely and inflation is roughly 2.0%.

The Fed should be nearing the end of its campaign to raise short-term interest rates. When they finish, it should allow price-to-earnings ratios (P/E’s)* for many stocks to expand a bit. This would broaden the number of stocks which do well beyond the current focus on extending the momentum in international and small cap stocks. We believe our companies are doing well and we expect their stocks to reflect that in the next few calendar quarters.

* Price-to-Earnings Ratios (P/E) – P/E equals the current stock price divided by the current earnings per share; it is the price currently paid for $1.00 worth of earnings.

The comments made by Ron Muhlenkamp in this article are his opinion and are not intended to be investment advice or a forecast of future events. Copies of past newsletters are available on our web site at www.muhlenkamp.com.