“It is essential for everyone to understand the logical sequence of events that makes these (big debt crises) all play out all the same.” – Ray Dalio “Years of monumental Quantitative Easing / Negative Interest Rates monetary policy affected the behavioral patterns of investors and changed the structure itself of [...]
“A generational opportunity hidden in plain sight. Its status of loneliness and ‘vox clamantis in deserto’ (a voice crying out in the wilderness) makes for potential outsized returns.” – Francesco Filia Q3 hedge fund letters, conference, scoops etc Plan 1: Buy-hold-rebalance. Buy lowest fee index funds you can find. In 40% [...]
“I want to reiterate my headline: managing debt crises is all about spreading out the pain of the bad debts, and this can almost always be done well if one’s debts are in one’s own currency. The biggest risks are typically not from the debts themselves, but from the [...]
“Typically the worst debt bubbles are not accompanied by high and rising inflation, but by asset price inflation financed by debt growth. That is because central banks make the mistake of accommodating debt growth because they are focused on inflation and/or growth—not on debt growth, the asset inflations they [...]
“The key to handling debt crises well lies in policy makers’ knowing how to use their levers well and having the authority that they need to do so, knowing at what rate per year the burdens will have to be spread out, and who will benefit and who will [...]
“I am writing this on the tenth anniversary of the 2008 financial crisis in order to offer the perspective of an investor who navigated that crisis well because I had developed a template for understanding how all debt crises work. I am sharing that template here in the hope of [...]
“[A] grain falling on a red spot can, by domino-like action, cause sliding at other nearby red spots.” – Mark Buchanan, Ubiquity, Why Catastrophes Happen I woke up early last Saturday morning and found John Mauldin’s Thoughts from the Frontline newsletter on “The Growing Economic Sandpile” in my inbox. In my favorite chair [...]
“The best insurance policy against missing big market moves is to have more than one online brokerage account.” – Barron’s, March 11, 2000Get The Timeless Reading eBook in PDF Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or [...]
“With solid household and business confidence, healthy levels of job creation, rising incomes, and fiscal stimulus arriving, there is good reason to expect that this strong performance will continue….” – Federal Reserve Chairman Jerome Powell in Jackson HoleGet The Timeless Reading eBook in PDF Get the entire 10-part series on [...]
“The deflationary period we’ve been in has come to an end.” - Louis-Vincent Gave, Founding Partner & CEO, Gavekal Research Last March, I shared with you GaveKal Research’s “Four Quadrants Framework.” Louis-Vincent Gave presented at the March 2018 Mauldin Strategic Investment Conference and suggested that we may be in the [...]
“The way to build long-term returns is through preservation of capital and home runs.” “Everyone sort of lives with their rulers in the past and doesn’t look at coming changes.” “Earnings don’t move the overall market; it’s the Federal Reserve Board… focus on the central banks, and focus on the movement [...]
“I don’t want to scare the public, but we’ve never had QE. We’ve never had the reversal. Regulations are different. Monetary transmission is different. Governments have borrowed too much debt, and people can panic when things change.” – Jamie Dimon, Chairman of the Board and Chief Executive Officer, JPMorgan [...]
“Here we are doing something that almost seems like a suicide mission… increasing the size of the deficit while we’re raising interest rates.” – Jeffrey Gundlach, DoubleLine Capital I’d add to that quote by saying that the administration is doing everything they can to piss off all of the buyers of our [...]
“So I think you’ll see rates go up and stocks go up in tandem at the end of the year.” “If you asked me to think of similar time periods, I’d say 1987 in the U.S., I’m not saying we are going to have a crash. It was a time [...]
“… [T]he trigger for a crisis could be anything if the system as a whole is unstable. Moreover, the size of the trigger event need not bear any relation to the systemic outcome. The lesson is that policymakers should be focused less on identifying potential triggers than on identifying [...]
“If I were trying to create a deflationary bust, I would do exact exactly what the world’s central bankers have been doing the last six years. I shudder to think that the malinvestment that occurred over this period. Corporate debt has soared, but most of it has been used for financial [...]
“The most important item over time in valuation is obviously interest rates… If interest rates are destined to be at low levels, it makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield.” – Warren Buffett on CNBC (May 2017) “Earnings don’t move the overall [...]
At a time when the unemployment rate is well below full employment and inflation is accelerating, the Federal Reserve (Fed) is already on a course to tighten policy in order to cool the economy. Fiscal stimulus has only served to elevate concerns about economic overheating, meaning that the Fed will likely [...]
“Excesses in one direction will lead to an opposite excess in the other direction.” “Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.” “Bull markets are more fun than bear markets.”– Bob Farrell (Rules #2, #7 and #10 of “Farrell’s Ten Market [...]
“What we anticipate seldom occurs; what we least expect generally happens.” Benjamin Disraeli We’ve been talking about a 3% yield on the 10-year Treasury as a line in the sand. It may well be. The important technical number is 3.07%. A break higher and 4% is not out of the question. [...]
“A Minsky moment is a sudden major collapse of asset values, which is part of the credit cycle or business cycle. Such moments occur because long periods of prosperity and increasing value of investments lead to increasing speculation using borrowed money.” China Growth Lower, But Debt Much Higher Wikipedia Global debt has reached [...]
“… I think Cohn resigning, was basically (telling us) that trade protectionists have taken over the economic thought process at the White House. And I think that’s really disturbing.” – David Rosenberg World Will Not End Over Trade Policy As "Art of the Deal" Is Just The StartBoAML: Investors Yet to Act [...]
