Despite headwinds of high oil prices Japan’s potential impact on the global supply chain and sovereign debt problems to name a few, investors confidence and the sustainability of the economic recovery is likely a major underlying factor in the continued advance in equities.

Earnings on the whole beat expectations in the fourth quarter and many analysts are predicting double-digit EPS growth in 2011 and 2012. Investor focus also appears to be shifting from an obsession with macro forces to the actual performance of individual companies. Co-relation or how much stock prices move together is one barometer to gauge whether macro high co-relation or company specific low co-relation forces are driving the market. Co-relations peak most recently in September 2010 at the hike of macro concerns and it declined substantially since then giving us reason to believe we are returning to stock sectors market.

From the firms perspective this has created an environment that I’d characterize as stable. Our AUM stands at 16.3 billion at the end of the quarter, up 4.5% from 15.6 billion at December 31st. Operating margins were 52.8% this quarter versus 53.2% in the prior quarter and cash flow continues to be solid with operating activities generating $12.3 million during the quarter.

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