William Smead
Chief Executive Officer
Chief Investment Officer



Dear Clients and Prospective Clients:

Sometimes you can’t hear because of all the noise and we at Smead Capital Management believe that this is one of those times. Let me share some interesting facts getting lost in all the noise this morning.

The inventory of homes for sale has dropped to a nine-month supply from as high as 11-months last year.

It is more economic in Seattle to buy a home with a $300,000 mortgage than it is to rent an appealing apartment.

Oil prices are holding below $40 per barrel, even though OPEC and an Army of investors are doing everything in their power to reverse the price.

More Babies were born in the U.S. in 2007 than in any year since 1957. We think that 2008 exceeded 2007 and as much as everyone has stayed home the last three months, 2009 could be a baby barn-burner.

We could probably be at the peak of distressed sales as a percentage of overall home sales.

The Federal Reserve reported that the savings rate has already risen to 3.8% in the U.S. from negative levels.

Many Americans thought that our country was going to be “ruined” by the “Socialist Policies” of the Roosevelt Administration in late 1932.

Stocks rose 370% from July 8th of 1932 to March of 1937.

Many Americans think that our country is going to be “ruined” by the “Socialist Policies” of the Obama Administration in early 2009.

The stock market has been miserable today, but most stocks are a long way from their November lows.

The U.S. Government seeks to stabilize the financial system and slow the economic contraction.

Unemployment is at 7.6% and could be headed as high as 9 or 10%.

Unemployment bottomed at 14.3% in 1937!

“History never repeats itself but it often rhymes.” (Mark Twain)

Best Wishes,

William Smead

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