“An economy built on endless consumption and debt is fundamentally unsustainable.” – Ray Dalio Things that are unsustainable, by definition, must change. Decades of unchecked government spending, coupled with a lack of fiscal restraint, have pushed the U.S. balance sheet to its limits. Too much debt restrains economic growth, limits the flexibility for countercyclical […]
Category: newsletter
Client Investment Letter January 2025
“I’m not worried about the deficit. It’s big enough to take care of itself.” – Ronald Reagan The stock markets closed out 2024 with another strong year, the second consecutive year with an over-20% gain in the S&P 500 Index. It should be noted that such back-to-back strong years are the exception and […]
Client Investment Letter October 2024
“The only function of economic forecasting is to make astrology look respectable.” – John Kenneth Galbraith While jokes about wrong-way economic projections almost write themselves – like the time inflation was confidently called “transitory” just before spiking to 9% – this quarter, central bankers both home and abroad reminded us of their power […]
Client Investment Letter July 2024
“The least productive people are usually the ones who are most in favor of holding meetings” — Robert Solow, American Economist The world is abuzz with a groundbreaking technology promising immense productivity gains. Every company is exploring it. Startups are popping up all over the place to take advantage of it. One company has […]
Client Investment Letter April 2024
“You ask what is our aim? I can answer in one word: Victory. Victory at all costs, victory in spite of all terror; victory, however long and hard the road may be. For without victory there is no survival.” – Winston Churchill Fed Chair Jay Powell is no Winston Churchill. For all intents and […]
Client Investment Letter January 2024
“It was never my thinking that made the big money for me. It was my sitting. Got that? My sitting tight.” – Reminiscences of a Stock Operator by Edwin Lefèvre As we close out 2023, the tumult of a brutal 2022 when stocks and bonds both went down substantially seems far away. Once […]
Client Investment Letter October 2023
“The ideal policy would bring about a soft landing, with inflation subsiding without a recession. But this is a difficult task to accomplish.” – Robert Hafer, St. Louis Fed, May 1971 The above quote is thought to be the first time that the aeronautic term was applied to economics. It has since become […]
Client Investment Letter July 2023
“When you are in the eye of the storm, you are often not aware of the whiplash around you.” — Hugh Bonneville In the last quarter, a sense of calm has come over the equity markets. The tumult of the first quarter of 2023, with its bank failures and high equity volatility, has […]
Client Investment Letter April 2023
“There is a lot of stuff we can’t control, but it is completely in our power to decide what the definition of a good job is. That’s up to us.” – Mike Rowe There was an old show on the Discovery Channel called Dirty Jobs where the host, Mike Rowe, traveled around the country […]
Client Investment Letter January 2023
“[Interest rates] act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull.” – Warren Buffett The path towards normalizing interest rates in 2022 reasserted the force of gravity on asset prices. Since 2008, the Federal Reserve and other central banks have engaged in extremely low […]
