Several years ago, I invited my new partner to play a round of golf so we could spend some time away from the office getting to know each other better. We played Tanglewood in Clemmons, NC, one of the best public golf courses in the state. Tom struggled at the start, making an eight on the first and a seven on the second. Walking to the third tee seven over par he said, .Not quite the start I was looking for.. It was an impressive display of composure.

2009 has started in similar fashion with the market falling in eight of the first eleven trading days of the New Year. It hasn.t quite been the start investors were looking for.

Taking composure to a new level... The headlines have been decidedly negative, not withstanding the .Miracle on the Hudson. and the remarkable composure of USAIR pilot Chesley B. "Sully" Sullenberger. The long list of layoff announcements continues to grow and it is difficult to predict when and at what level unemployment will peak. As we have stated in previous editions of Willingdon Views, an eventual turn in employment is necessary to reverse the market slide.

On Tuesday the eyes of the world will be focused on Washington, DC as Barack Obama is sworn in as the first African-American president of the United States. While this is certainly an historic event, it is also a time of historic challenge for our country, and the pressure on Team Obama to come up with the solution to our financial crisis and to jump start the economy is immense. On that note, here are a few interesting tidbits. By latest count, Obama has promised to create .or save. about 4.1 million jobs. Within this number he says he.ll create about 500,000 .green jobs.. To put that number in perspective, there are approximately 10,000 people currently working for companies that produce either solar cells or wind equipment (according to the Wall Street Journal). How we go from 10,000 to half a million is anybody.s guess, but it seems like a bit of a stretch.

What the market is saying... The negative start to the stock market so far in 2009 reflects two primary concerns, in my view. First, the economic turnaround could be further off, and perhaps the economy may even worsen before it eventually rebounds. Second, corporate earnings will continue to deteriorate. At this stage there are few signs that earnings will surprise on the upside. Nevertheless, we are hopeful that at some point this year the employment situation will improve and the outlook for corporate earnings will brighten as well.

There are two reasons I.m hopeful despite the negative start to the year. First, I do think Team Obama gets it. Their commitments to rebuild our country.s infrastructure, improve schools, and reduce dependence on oil, are all worthy goals. "We will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950." (Barack Obama radio address on 12/6/08.) Although we are holding our collective breath to see the details, some of their programs are bound to work.

The second reason is my faith in the resiliency of the American citizen. Over time, we will learn to live within our means; we will learn to discipline our urges for instant gratification while we relearn the value of long term savings and investment. We will adapt and work more creatively in response to the realization that we may have to extend our careers a few more years. Beyond that, we have a tremendous opportunity to refocus on what is most important in life - faith, family, and community service, for starters. Colin Powell said it best in a recent Wall Street Journal article - "This is not a time to retreat to our homes and wait until it’s safe to emerge. It is the time to give more, to step forward and serve our fellow citizens, and to reach into the reservoir of this nation’s unrivaled capacity for good." The naysayers may be having their day of late, but don.t count the United States of America out just yet.

In the meantime... My sense is that individual investors, as well as investment firms, will spend their time waiting for the eventual turn in the economy in very different ways. I suspect a large percentage of individuals, disappointed, disillusioned and increasingly fearful will sit on their hands. Similarly, many large institutions, facing management turnover, shareholder angst, and in some cases balance sheet and liquidity risk, will also be frozen with fear. But it is those individuals and institutions, which can see both the opportunity, as well as the risk, in these volatile and trying times that will ultimately out perform their competition. In every fear-ridden market environment there will be stocks that should be sold and also stocks that should not be sold. A shoot first and ask questions later mindset creates buying opportunities, for those that have, in a word, composure.

Some of the things we look for in order to identify opportunities include:

• Companies that are gaining market share
• Companies that lead in innovation
• Companies with conservative fiscal management
• Companies with sustainable cost advantage
• Companies that exhibit management discipline and focus

The list of companies that pass this test may be shrinking but they do exist. Rest assured we are searching for them as we speak.

Finally, in the name of full disclosure, (or perhaps his composure.) Tom did shoot 79 that day, playing the last sixteen holes two over on the par 70 championship course.