anecdotes

Let’s go back a decade, I told the CIO. We were discussing where to put money for the coming years. Most often investors look backward for trends and extrapolate their trajectories into the future, or they search for beaten down assets, hoping for mean reversion. But what should you do after a year where nearly everything declined? Treasury bills outperformed virtually all assets last year. Such broad outperformance

“General Mattis retired in 2013 with four stars, worked in academia, and was recalled to serve President Trump as secretary of defense. He gained a reputation as the most independent, and best, of the president’s cabinet officers, serving as a reassuring bulwark to America’s allies who sometimes questioned the president’s commitment to fighting common enemies,” wrote the Army officer. “The reputation Mattis earned fo

“The problem they face is that inflation will increase their liabilities while simultaneously deflating the valuations of their assets,” said Eric. We were discussing the unenviable plight of pensions and endowments in a world of rising prices — their cost of living adjustments and operating budget increases. “But the status quo won’t deliver the 7.5% returns they require, and deflation will devastate their por

“It’s just so obvious to us,” said Eric to the CEO and CRO over lunch. As I listened, the word ‘obvious’ gave me pause, but when so many people are painted into corners the outcome can appear predestined. Nearly every allocator we talk to needs to annualize at +7.5%, so they’re locked into some version of the same leveraged equity-centric portfolio. Everyone’s short inflation – some know, others don’t. Inflatio

“Why was consensus so wrong in the 1960s?” asked the US pension CIO. The 1960s parallel seems to be roughly playing out today: very low unemployment leading to higher wages had disrupted the stable, low interest rate regime. In 1965-66, a shift higher in yields sparked a scary correction in stocks and housing. Recession fears drove the Fed to pause and then reverse their hikes, incorrectly. “What did they miss?” pres

“What really matters?” he wondered, the Pacific Ocean far below, magnificent, the flawless symmetry of its swell. “Brexit doesn’t really matter,” he thought, which is not to say it won’t create waves if it ever happens. “Italy matters more,” he thought, delicate ice crystals creeping in from the edges of his oval widow, nature’s order, grace. Europe’s political project has been fraught from the start and will remain

“We are trying to understand America, Americans,” said the soft-spoken Scandinavians, financial market pillagers. “America has been the world’s moral authority. And okay, so perhaps you have not always lived up to that. But you have tried. And it has been this way for our whole lives.” I nodded. “You have stood as the protector of global trade. Free trade. Democracy. And what is right versus wrong. America has defend

“What the hell Charlie?” said Teddy, “Cover up your arms while we’re eating. Those sores are disgusting.” Charlie shrugged, too accustomed to sibling ridicule to be embarrassed. “That’s what happens when you itch mosquito bites,” said Olivia (15), an authority on basically everything. “And look at your fingernails Charlie, they’re filthy, no wonder you’re infected,” said Jackson (16), always game for gang tackles. “T

“Capital markets and combat are not turn-based games like chess,” said the Deputy CIO, top decile performer, Marine Force Recon veteran. “This means that there’s no such thing as waiting to make a decision, because waiting is a decision,” he continued. “Waiting can frequently be correct near-term, but you need to be intentional about how to use that time – to gather information, prioritizing the data that will