Karen Dolan: I find it very interesting, your moves in energy and also your moves in health care. You mentioned policy coming out of Washington. Well, we've definitely seen a lot more on the health-care front, and you've been reducing your health-care weight. I think you used to be quite a bit overweight for the past several years and now you're at an underweight position. What have you been selling? Is it related to the policy moves in Washington?
Clark Winslow: Well basically, yes we have been overweight, and it's been helpful to our performance attribution. We have tried to focus actually for some years in the companies that we think are more the providers to the solution to the health-care problem and costs.
We've been focused on the ... pharmacy benefit management companies such as Medco Health, Caremark/CVS, and in the generic area, Teva which by the way set an all time high today after they announced earnings and their outlook.
We sold the managed care companies back in 2006. We haven't owned major pharma companies for about seven or eight years because we saw that the Wall Street analysts' view of what the earnings growth was going to be was way too optimistic and they had high valuation at the time.
So we trimmed some of the stocks that had done well or we didn't see as much earnings opportunity and are concentrating on those names and also a company like Gilead, which over the longer term is a fairly, almost dominant, franchise in the HIV drug area.
In the consumer area, we remained underweight in the consumer area and that is because as I mentioned, we still have a secular deleveraging for the consumer so the consumer spending is not going to be, in our view, the normal cyclical recovery that we've had in past recessions. Plus, in effect, we're overstored. With demand being a little more muted and plenty of supply if you will, that's not a good formula for profit margins for retailers.
Dolan: Do you see that across the board or are there certain retailers?
Winslow: We have tried to emphasize the companies that we think offer the best value at their price points. So we do have a position in Wal-Mart. We have a position in Kohl's in the department store area. We have a position in Target because they have medium price points above Target and as the economy begins to improve we'll see a little bit more, we can expect traffic into Target and helping them.
We've also taken position in Carnival Cruise, which we owned some years back. They now have over 50% share of the cruise market, great cash flow and balance sheet. So we see an opportunity there because if you don't gamble too much on the ship and lose money, it's still a very good value for vacations.
Dolan: Well thank you for offering your perspectives today. We really appreciate it.
Winslow: Thank you. We're optimistic on the outlook. We think a lot of the right things are being done. We think that you have to be careful. In our basic process we started off with a quality company to begin with, with a good balance sheet. And we think coming out of this recession, it's not going to be the company with the strained balance street who most likely will still have some difficulty getting financing, but the companies that already have a strong balance sheet. They can take advantage of the situation.
Dolan: Thank you very much.