Dear Friends, In the new year, we had hoped to put behind us the volatile political situation that has afflicted our country for the past several years. Unfortunately, the events of the past week have dashed those hopes. A violent attack on Congress has shaken many of our institutions. A few years ago, it would …
Dear Friends, The third quarter saw bond and equity markets remain at opposite extremes in response to continued difficult economic conditions. Bond markets are signaling a long recession ahead, with interest rates projected to remain below 1% for the next several years. Equity markets, in sharp contrast, are priced near all time highs, despite a …
Friends, The past several months have been a very challenging time bringing dramatic changes to all our working and personal lives. We hope you and your family are safe and in good health. In the capital markets world, the past quarter has been nothing short of remarkable. In March, we saw the quickest descent into …
There are decades where nothing happens; and there are weeks where decades happen — V.I. Lenin We hope you and your family are healthy and safe during this time. The past quarter in the markets has been one of those periods where days can seem like years, and weeks like decades. We entered 2020 with …
The demand shock created by the Coronavirus outbreak has already created historic levels of market volatility. Today, the market plunged after the Fed announced in a call on Sunday that it would cut rates to zero and implement buying programs for US Treasuries and Mortgage Backed Securities. During such periods of market volatility, we keep …
Friends, The last few weeks have been history-making for global stock markets, but today was especially notable. We’ll let a graphic for the US markets illustrate (see above). Today was the worst day for US stocks since 1987, when markets fell over 20%. But the point drops today are even more extreme. The Dow, a narrow index …
Dear Friends, The financial markets saw a substantial sell-off in risk assets today as all major US stock market indices closed down over 7%. Current market levels are roughly 1-2% away from levels that would signal a bear market (20% down from recent highs). The decline was so steep, market circuit breakers kicked in this …
With the Iowa, New Hampshire and Nevada largely behind us, and South Carolina tomorrow, the likelihood that Bernie Sanders will be the Democratic nominee for president has grown. 538 now places this probability at 40%. We believe it is time to meaningfully engage with this possibility and consider what it would mean for the US …
This week has seen two precipitous declines in US stock markets. The volatility has been attributed to fears of the Coronavirus strain named COVID-19. This infectious disease has now spread to several countries and caused over 2700 deaths. The reports of confirmed cases have almost certainly been under-counted as numerous developing countries with weaker health systems lack the resources to …
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 …
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 …
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 …
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 …
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 …
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 …