The Long View
Given the extraordinary downside volatility affecting both equity and bond prices this past quarter, we felt an early commentary might be appreciated. We’ll cut to the chase – Our longer-term view for your portfolios is much more positive than what is currently being discussed in the financial press because we own some of the best-run-companies […]
War and Inflation = A Nasty Cocktail
Investor attention has pivoted over the past few weeks from the war in Ukraine back to the accelerated unwinding of global monetary accommodation. While the war could still pose further threats to economic growth, global bond markets have struggled as central bank policy rate expectations move higher. As the war settles into an apparent stalemate […]
2022 Outlook?
Monetary and fiscal policies certainly helped jump-start the current economic expansion—as is customary in the aftermath of every recession. But expansions also become self-sustaining, which is why policy juice eventually ends. In our view, this recovery has an abnormally large number of “sustainable forces” that are likely to keep the expansion healthy long after monetary […]
Significant Crosscurrents Prior to Q3 Earnings
Equity markets have been struggling with a number of short-term risk factors. None at this point (hopefully) seem to threaten the big-picture outlook of a solid global economic recovery. But when markets significantly front-run positive fundamentals (as they have), even modest risks can cause temporary setbacks. We remain short-term cautious, and expect the recent correction […]
A Correction Is Healthy
A host of factors have recently been pressuring the stock market. The S&P 500 Index has nearly doubled from its bear-market low in March 2020, signifying one of the strongest 16-month gains in post-war history! After such a robust, uninterrupted advance, it simply feels overdue for a correction. Moreover, compared to historical norms, valuation measures […]
The Reopening
Over the last year, we witnessed policymakers’ experiment with ways to force the economy out of its steepest dive since the Great Depression, applying massive fiscal and monetary stimulus at light speed. The Fed used the power of its record-setting $7.6 trillion (and growing) balance sheet while Congress voted $5.5 trillion of fiscal stimulus to […]
Thank God It’s 2021
2020 will go down in history as a year we all wish we could forget, but never will. The unprecedented coronavirus pandemic changed everything. While the economic and earnings recession was short but deep, the humanitarian crisis remains devastating. The U.S. alone has already seen more than 15 million cases (over 75 million globally) and […]
Choppy Waters Lie Ahead
When the world entered the throes of the sharp recession in the spring, we expected a sharp rebound followed by a gradual and choppy economic recovery. The initial recovery resembled a “V” pattern, but the path has since cooled and looks more irregularly higher. Two key factors have driven economic momentum: 1) massive monetary and […]
A Cautious Outlook
Stock prices have roared back strongly through the second quarter, as investors grew increasingly optimistic over prospects for economic reopening and the unprecedented monetary policy support that provided a strong tailwind for equities. At this point, however, stocks are looking somewhat richly valued and we think investors may be looking past some key risks. We […]
Recession Created by Bugs
The U.S. economy is in free-fall, perhaps headed for its deepest recession of the post-war era. Typically, recessions are necessary to corrects that build up during an expansion—for example, restoring liquidity, improving savings, purging bad debt, and realigning exorbitant risks. In the economic recovery that just ended, however, there were very few excesses or problems […]
