We trust you’ve had a restful and enjoyable summer. This was a difficult hurricane season for many of our fellow Americans, especially those in Puerto Rico and across the South. A number of category 4 and 5 hurricanes made landfall in the US, causing enormous damage in Puerto Rico, Houston, Florida and the Virgin Islands. …
Dear Friends, The 2nd quarter saw the Fed continue its strategy of withdrawing stimulus from the US economy. Since December 2016, the Fed has raised rates three times, bringing the target rate up to 1.25%. Their most recent statements suggest the target rate will continue to rise if unemployment and inflation stay relatively stable. There …
Dear Friends, The first quarter of 2017 was full of eventful news for markets. We saw a Fed rate hike, record low unemployment rates, all time highs for US equity markets and a new administration sworn in, with Republicans now in full control of Congress. In our view, this likely marks an inflection point for …
Dear Friends, We hope you have had a good start to the New Year and wish you the best for 2017. As always, in our first letter of the year we have attached a review our 2016 investment themes and a list of our investment themes for 2017. The fourth quarter of 2016 revolved around …
Fed stays the course: We expect the Federal Reserve will continue to raise rates as stated. We expect the Fed-Funds rate to rise above 1.5% over the course of 2017. Equities Caution: We continue to be cautious on US equities, as we have been for the past several years. S&P 500 is priced at over …
This was a difficult year for our prognostications. We were wrong (or early) on core calls including rising interest rates and an equities bear market, that undercut many other themes that relied on those predictions. Our score was 3.5 out of 10. × Fed stays the course: We expect short term rates to rise by …
Many motives have been advanced for the great Indian demonetization of 2016. These include reducing the informal/untaxed “black-money” economy, removing counterfeit notes from circulation, making terrorist financing more difficult etc. Might there be another, unstated, reason apparent to central bank watchers? A subtle subterfuge to reduce the perceived level of non-performing assets (NPAs) at Indian …
First, we think a Trump victory is quite unlikely. That said, the probability is not zero, it’s likely to be around 15-25%. We routinely analyze even less likely events and their impact on markets, so we have considered the reaction of markets if Mr. Trump were to win the general election. There will be almost no place to hide …
Friends, The Federal Reserve chose not to raise rates in September, despite speculation by many participants that they would. The decision went as we expected since the Fed is generally unwilling to move rates this close to a presidential election. As an institution, the Fed is very reluctant to take actions that could be interpreted as favoring …
Louis will be speaking about Socially Responsible Investing at the monthly United For Action meeting this Thursday, September 8th from 6:30-7:30. United For Action is Non-Profit organization comprised of volunteers who shape public policy decisions by organizing and mobilizing groups of like-minded citizens to promote public health and sustainability. The meeting is open to the …
Friends, The second quarter of 2016 saw some stabilization in global equities after a very volatile Q1. But this calm was short-lived as the surprise results of the Brexit vote roiled markets in the last weeks of the quarter. We do not believe the Brexit referendum in itself will have a significant impact on the …
Friends, The first quarter of 2016 saw market gyrations far rockier than many prognosticators had expected. A sharp drop in commodities prices and oil in particular sparked fears of a global slow-down and impacted all asset classes. Increased oil production in North America and the prospect of renewed imports from Iran led to expectations of a supply glut. Slowing economies in China, …
Fed stays the course: We expect short term rates to rise by 1% over 2016, and believe long-term rate rises will be roughly commensurate. We believe the Fed’s board will stick with their stated intentions, it would require dramatic events to make them change course during an election year. A return to risk: We …
After almost seven long years at effectively zero interest rates, on December 16th the Federal reserve raised rates 25 basis points and signaled a handful of similar increases to come over the course of the year. This move was not unexpected, and there are numerous caveats and complications since so many unconventional tools have been …
Overall, we did well on our call for 2015. We were right on six, half right on three others and had one wrong. In general, the year lived up to our expectations of a low return environment with the anticipated Fed rate hike being the biggest influence. ~ If not now, when? If …