Alone with My Thoughts – 11/01/24
Famed hedge fund manager, Paul Tudor Jones, remarked recently on CNBC that with respect to the upcoming election, all roads point to inflation. In other words, neither of the candidates is known to be or is even suggesting to be an inflation fighter. Whether it be the usual suspects of pre-voting giveaways like no taxes on tips, no college loans, money for start-ups, or deductions for car loan interest, they all are inflationary. Throw in some tariffs and infrastructure spending under the guise of the Inflation Reduction Act and you get the picture. Paul Tudor Jones’ main concern is that prices will seemingly go higher as our national debt, and more importantly, our national debt interest costs go up exponentially, which will keep rates higher and costs higher, etc. The ten year is ending the week at about 4.24%, while gold is setting new records. We are positioning for a potential soft landing with the possibility of some Halloween surprises over in the bond patch.
Alone with My Thoughts – 8/20/24
Time in the Market
Iconic Wall Street observer Jeremy Siegel reminds us in a recent Barron’s article that stock investing is the most volatile asset in the short-term and the most stable asset in the long-term. Most volatile in the short-term and most stable in the long-term. Traders are chasing the next great earnings opportunity or corporate development. Investors, in contrast, are more concerned with compounding earnings, dividends, and share buybacks because that is where wealth is created. This message is so simple, yet so many fail to understand it.
Alone with My Thoughts – 6/25/24
We Need a Diet Shot for Governments
Last Thursday, the Wall Street Journal reported that France was facing disciplinary action from the EU for running a high budget deficit. Not only are the French dealing with this deficit, they are also above the EU requirement of no more than 60% of debt above GDP. In the US interestingly, our debt is about 100% of GDP and just this past week our deficit is now projected to be about $2 trillion for the year. Good news, we are not a member of the EU, bad news, our interest on our debt is now almost $1 trillion dollars a year, or about the same as our entire defense budget (or for those keeping score, about 30% of our tax revenues so far this year). Mon Dieu!
Alone with My Thoughts – 5/14/24
The stock market can be so emotive. From the elation of riding the wave of the “next biggest thing” like AI to the despair of outdated technologies (think Kodak, VCR’s, and Blockbuster). As for amazement, consider that Sam Bankman-Fried is sitting in jail for the next 25 years as a result of his crypto financial fraud schemes. It has now just been reported by both the Wall Street Journal and Barron’s that his schemes owe investors $11 billion dollars and that after liquidation, the fund has about $15 billion dollars to pay off the aforementioned creditors. So…he gets 25 years and investors “gain” $4 billion on his strategy. Rarely, if ever in history, has financial fraud resulted in a windfall for investors. The feeling of perplexion comes to mind…
Alone with My Thoughts – 2/15/24
Super Planning
The recently played Super Bowl will go down as one of the most exciting finishes ever, as the KC Chiefs pulled out an overtime victory. Andy Reid, the future Hall of Fame coach of the Chiefs, did what he does best, and what the greatest coaches do best, and that was to make adjustments at halftime. Many people will consider getting a financial plan, to help map out their financial future. Instead of a financial plan, we try to look at it as financial planning, meaning that life will throw us many changes, curve balls, and situations that may require halftime adjustments. Speaking of Super Bowls, “Just because you made a good plan, doesn’t mean that’s what’s going to happen.” Taylor Swift
Alone with My Thoughts – 2/1/24
A record high in the S&P 500 was made on January 2, 2022 and now, just over two years later, we are making record highs on a daily basis. Here are three takeaways…One, the S&P has now made up for the viscous declines of 2022. Secondly, an interesting stat that comes from Ned Davis Research (thanks to our friends at Riverfront and JPMorgan) shows that making new highs after at least a one year time period, have historically resulted in positive performance over the next 3, 6, and 12 month periods. Finally, with the expectation of future rate cuts from the Fed in 2024, has there been other times when the Fed cut rates while stocks were making new all-time highs? 2024 is off and running.