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As Sen. Sanders and Warren’s portfolios show, divesting from fossil fuels isn’t easy

As Sen. Sanders and Warren’s portfolios show, divesting from fossil fuels isn’t easy

In the last debate between Democratic presidential candidates, moderators challenged billionaire Tom Steyer on his commitment to combating climate change. Steyer made his fortune in the hedge-fund industry by investing in fossil fuel businesses among other things. He said this was before he fully understood the challenge posed by climate change and has since divested of …

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2019 Q4 letter: 20/20 vision may not be perfect

2019 Q4 letter: 20/20 vision may not be perfect

Dear Friends, As we close the books on 2019, we wish you and your family the best for the upcoming year. 2019 was an unexpected year for investors. Despite pressures from trade wars and uncertain policy, stock markets bounced back from a rough close to 2018 and rose significantly (over 25% in the US). GDP …

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Economic Themes for the 2020s: 20/20 Vision May Not Be Perfect

Economic Themes for the 2020s: 20/20 Vision May Not Be Perfect

Since 2020 marks the beginning of a new decade, we focus on themes we expect to play out over the next ten years. Emerging Markets continue to take over the world. Population growth and younger demographics in emerging markets will continue to drive growth through the 20s, as the population in developed market economies continues …

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2019 Economic Themes: Return of the Bear – Reviewed

2019 Economic Themes: Return of the Bear – Reviewed

Bear Market Comes out of Hibernation.  […]  We contend this reversal gains steam this year as stocks globally will finish 2019 in firmly negative territory.  […] –  We were flat out wrong on this one. After being down 4.45% in 2018, total return on the S&P was an eye-watering 31.29% in calendar year 2019. The MSCI …

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Q3 letter: The market can remain irrational…

Q3 letter: The market can remain irrational…

We trust you’ve all had a pleasant summer. As we head into autumn, the question on every investor’s mind seems to be when the longest running bull market in US history will end. For several quarters, we’ve advocated caution based on our view that equity valuations continue to be unreasonably high. We have, however, always …

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Q2 letter: A sugar high

Q2 letter: A sugar high

Friends, We hope you’ve had a good start to the summer. The interest rate outlook has changed considerably since the beginning of the year. Investors entered  2019 with an expectation the Fed was likely to continue raising rates over the course of the year. However, recent comments from Fed officials have made rate hikes far …

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Q1 letter: A Song of Spring

Q1 letter: A Song of Spring

Dear Friends, Spring is in the air. Subir’s younger daughter won’t step outside without checking to see what plants and trees have flowered. It is a special joy to be reminded of the resilience of life and the cycle of the seasons. Back in the more quotidian world of markets, Q1 saw US equities rally …

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2019 Investment Themes: Bear Market Blues

2019 Investment Themes: Bear Market Blues

Dear Friends, We hope you’ve had a restful holiday season with family and a pleasant start to the New Year. The fourth quarter of 2018 saw steep declines in US stocks, with certain indices entering bear markets (20% below their highs). Amid these moves, the Federal Reserve followed through on broadly held expectations and raised …

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Review of 2018 Investment Themes

Review of 2018 Investment Themes

2018 was an uneven year for our market predictions.   We were right on six calls and wrong on four calls.  While we were right about the general market direction, a few of our sector specific calls were off the mark. Slow But Steady Rate Rise: We expect the Fed to maintain the normalization plan and …

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The signal among the noise

The signal among the noise

Friends, As we approach the end of an eventful 2018, there continues to be a steady torrent of major news stories dropping daily. From CEOs tweeting about taking their companies private, to escalating global trade wars, to bitter battles on Capitol Hill, the financial markets have had a lot to digest. Though the news can …

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Keeping an eye on what matters for the economy, Trade.

Keeping an eye on what matters for the economy, Trade.

Dear Friends, Over the past year and a half, trying to absorb news has felt a bit like drinking water from a fire hose. Like many of you, we have steadily become more concerned and simultaneously more accustomed to the chaos being created by the current US administration. While the actions of our government have deviated from the …

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2018 Q1 letter: Why the roller-coaster market is back.

2018 Q1 letter: Why the roller-coaster market is back.

As we noted in our 2017 year-end review, we expect 2018 to be a tough year for the domestic stock market. Rising interest rates and valuation concerns are going to be the major story for investors this year. Stock market valuations remain elevated, with the S&P 500 currently priced at 24 times last year’s earnings. …

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Income inequality is rising in America, and corporate boards are to blame.

Income inequality is rising in America, and corporate boards are to blame.

That’s what I read into the comprehensive analysis of individual income tax returns by Bakija, Cole and Heim. The Washington Post has coverage of their work. The work is a damning indictment of the manner in which corporate boards have abdicated their responsibility towards shareholders to rein in excess corporate compensation. The compensation process is run …

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What should investors make of the big drops in the stock market.

What should investors make of the big drops in the stock market.

Dear Friends, We rarely deliver a mid-quarter email, but the last two days of large drops in the equities markets and recent conversations with clients have prompted us to provide this update. On Friday, the Dow Jones Industrial Average dropped 666 points (2.6%), which was followed by a 1,175 point drop (4.6%) today. The S&P500 …

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