Weekly Thoughts 04 October 2013

I was wondering about this US government shut down situation. [I thought it was only Italy that periodically had no government!] So I sent a question to an asset manager whom I speak to regularly and said, ‘How worried are you guys about this matter? I would think that it might even create further and deeper value buying opportunities on US and other stock markets? Due to the worry and investor withdrawal – that’s all. Not due to any real corporate problems?’

He responded by saying ‘I think you have it spot on. The fact that the US government has shut down temporarily won’t have an impact on the sale of basic necessities across the globe. Our companies have continued to produce good results despite numerous US Government shutdowns in the past.’ He then sent me info of the 18 occasions that the US government has shut down since 1976 and correlated that to the dividend track record of Johnson & Johnson. No interruptions in the dividends or their growth.