16 Jul 2010 Heartland Funds - Q2 2010 Commentary
As of the end of June, the Heartland Funds continued to outpace their benchmarks on an average annual basis over the 3, 5, 10 year and since inception time periods. These results (shown on the next page) illustrate the benefit of value investing and importance of maintaining a long-term perspective.

In the second quarter, front page news caused many investors to question the sustainability of the economic recovery. The “Flash Crash,” sovereign debt problems and the tragedy in the Gulf seem to have negatively impacted sentiment. The cover of Bloomberg Businessweek1 featured the mask of a bear under the heading “GRRRRR!” and a USA Today survey revealed more than half of its readers think the stock market will experience a double-dip.

At Heartland, we have listened to business leaders from multiple industries and many are reporting signs of a broad-based recovery. First quarter earnings were also positive, as 77% of S&P 500 Index companies beat forecasts.3 If Bloomberg Businessweek’s persistent pessimists were talking directly with management teams, as we do, they might share our optimism.

Macro-economic data confirms our view, we believe. Historically, one of the most reliable economic indicators has been the yield curve, or the difference between long and short-term interest rates. A positive slope (long rates higher than short) has been indicative of economic growth: Since 1926, 13 of 15 expansionary periods have had a positive yield curve.4 As shown in the chart, today’s steep and positive curve forecasts economic improvement and, perhaps, an increase in stock prices.

Investors may be pessimistic, but in our opinion today is a great time to be hunting for value. Our team continues the search for businesses priced at a fraction of intrinsic worth and with low valuations in relation to earnings, cash flows and book values.

28 Dec 2009 Video: Year-End Outlook
Bill and Will Nasgovitz of Heartland Funds provide a brief 2010 outlook.

03 Nov 2009 Heartland Funds - Q3 2009 Commentary
Despite the market’s significant advance, data suggests investors seem to be disinterested in equities as money has poured into bond or debt mutual funds. Approximately $214 billion has flowed into fixed income funds since the beginning of March, while equity mutual funds have seen an inflow of only $10.5 billion.

We interpret the fund flow data as bullish for stocks, as investor avoidance of equities is, in our view, a contrarian indicator of future flows.

After the worst bear market since the 1930s, investors seem to be avoiding losses rather than seeking gains.

20 Aug 2009 Video: The Most Bullish Chart I've Ever Seen - Bill Nasgovitz
In my 40 years of investment experience, I've never seen a more bullish chart...

20 Aug 2009 Heartland Funds - Semi-Annual Report
Expert opinions differ as to whether the poor markets have run their course or the bears have merely been in hibernation. At Heartland, we are not in the business of forecasting, but rather, particularly for the Select Value Fund, we are in the business of utilizing our time tested 10 Principles of Value Investing™ to choose stocks we believe have long-term potential for appreciation, regardless of capitalization. Markets change daily, but our approach “as an investor and not as a speculator,” as Benjamin Graham said, remains consistent day after day, month after month, and year after year.

05 May 2009 Heartland Funds - Market Commentary
Market cycles typically coincide with overall investor outlook and confidence...

... That said, we can’t help but notice the remarkable continued build up of cash ... We believe that this mountain of liquidity could be a continued stimulus for stock appreciation as investors regain confidence in stocks.

06 Mar 2009 Heartland Advisors - Annual Report
Uncertainty, irrationality and volatility will most likely continue in 2009, yet during economic turmoil it becomes even more important to seek out individual businesses with sound balance sheets and competent leadership.

As investors sought refuge from volatility in 2008, assets moved to cash and reached record levels. We believe this will eventually fuel the next rally. Combined with remarkably low valuations, we remain optimistic.

No matter the crash of 1987, the tech wreck or the unfolding crisis today, Heartland’s message remains unchanged. We believe times like these present exceptional opportunities for the disciplined, long-term value investor.

...we believe investors have overreacted by driving down stock valuations to levels not witnessed in decades, offering the opportunity to buy blue chip companies at value prices.