1. Hyre Weekly Commentary
March 12, 2012
The Markets
An important key to support the stock market is starting to fall into place.
You may have guessed that key is JOBS. Last week, the Labor Department reported an increase
of 227,000 new jobs in February. Over the past six months, 1.2 million new jobs have been
created – the highest six-month total since 2006. More jobs could lead to more spending which
could boost corporate sales, earnings, and, possibly, stock prices.
While the recent employment numbers look pretty good, leave it to Fed Chairman Ben Bernanke
to rain on the parade. In testimony to Congress on February 29, he said, “Notwithstanding the
better recent data, the job market remains far from normal: The unemployment rate remains
elevated, long-term unemployment is still near record levels, and the number of persons working
part-time for economic reasons is very high.”
On a different note, last week marked the three-year anniversary of the March 9, 2009 stock
market low. Since the low:
The S&P 500 index has risen just over 100 percent
Corporate operating earnings per share have risen just under 100 percent
Corporate revenue per share has risen a meager 1 percent
Source: Barron’s
So, how can corporate earnings nearly double while corporate revenue barely budges? The
answer… cost cutting – and a big chunk of the cost cutting came from whacking jobs. Even
though we’ve added over a million jobs in the past six months, we’re still down about six million
jobs from the peak, according to Barron’s.
The good news is the recent spurt in job growth may suggest that corporations have about
reached the limit of cutting jobs and now have to add staff to support even small gains in revenue
growth.

2. Data as of 3/9/12 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.1% 9.0% 5.1% 26.5% -0.5% 1.6%
DJ Global ex US (Foreign Stocks) -1.2 11.2 -9.7 23.0 -3.3 5.2
10-year Treasury Note (Yield Only) 2.0 N/A 3.5 2.9 4.6 5.3
Gold (per ounce) -1.1 7.2 17.9 22.2 20.9 19.2
DJ-UBS Commodity Index -1.6 3.3 -12.8 11.5 -2.8 4.1
DJ Equity All REIT TR Index 0.2 6.0 8.3 46.8 -1.1 10.2
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend)
and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the
three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the
historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not
applicable.
THE AGGREGATE NET WORTH OF U.S. HOUSEHOLDS WAS $58.5 TRILLION at
the end of last year, according to data from the Federal Reserve Flow of Funds report. To put that
number in context, household net worth peaked at $66.8 trillion in the third quarter of 2007. It hit
a five-year low of $50.5 trillion in the first quarter of 2009 – the same quarter as the bear market
low, according to Bloomberg.
The aggregate net worth of U.S. households is still $8.3 trillion below the all-time high set back
in 2007.
Net worth is the difference between total assets and total liabilities. Investment holdings and real
estate typically account for the bulk of households’ assets so any change in the financial or real
estate markets can cause big swings in net worth.
Parsing the data a bit further shows these two interesting numbers:
1. Household debt as a percent of disposable income fell to 113 percent at the end of
last year. This ratio peaked at 130 percent in 2007 and has been steadily declining. It’s
good to see this number drop because it means households are deleveraging and have
more income to support their debt level, according to The Wall Street Journal.
2. Debt payments as a percent of households' after-tax income (the debt-service ratio),
fell to a 17-year low of 11.1 percent. Again, a lower number is better because this
means consumers are allocating less of their monthly income to pay off debts. With more
money left over, they can spend it on things that could propel the economy.
Some of the decline in these debt ratios may be due to the debts being written off as opposed to
consumers actually having the money to pay them off. Either way, household balance sheets
seem to be improving.
We don’t want to get too caught up in numbers here because that can distract from the key point
which is this – consumers are deleveraging, they’re spending less of their income paying off
debts, and that may bode well for the economy.

3. Weekly Focus – How to Innovate
Some of the most innovative new ideas are developed by simply connecting an existing idea to
something new says author Jonah Lehrer. For example, the Wright Brothers were bicycle
manufacturers whose first plane was akin to a bicycle with wings. Johannes Gutenberg used his
knowledge of wine presses to create the printing press. And, more recently, the founders of
Google took the existing idea of ranking the importance of academic articles by the number of
citations and applied it to their search engine algorithm. The result – web pages that have lots of
other web pages linking to it tend to score high in a Google search.
The next time you need to come up with a creative solution to a problem, try taking an idea from
an unrelated field and apply it to your situation. Who knows, it might become the next billion-
dollar idea!
Best regards
Jim Hyre, CFP®
Registered Principal
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would
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Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in
general.
* The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.
* The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the
National Association of Securities Dealers Automated Quotation System.
* Gold represents the London afternoon gold price fix as reported by www.usagold.com.
* The DJ/AIG Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The
Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen
as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment
Trust (REIT) industry as calculated by Dow Jones
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future
performance.
* Consult your financial professional before making any investment decision.
* You cannot invest directly in an index.
* Past performance does not guarantee future results. mc101507
* This newsletter was prepared by PEAK for use by James Hyre, CFP®, registered principal
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4. Jim Hyre, CFP®
Registered Principal
Raymond James Financial Services, Inc.
Member FINRA/SIPC
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