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Hope all goes well… Dusted off an anecdote from 2016 (see below). A discussion with an extraordinary human being, on the long fight for freedom. See you next Sunday with full weekend notes. Week-in-Review (expressed in YoY terms): Mon: China CPI +0.9 to +5.4% (PPI +0.6 to +0.1%), Turkey imposes new controls on currency speculation, Italian industrial production -4.3%, Merkel’s protégé Annegret Kramp-Karrenbauer resig

“What’s tomorrow’s test about Mom?” asked Charlie (10), lying on the kitchen couch. “It’s your math placement exam,” answered Mara. “Is it important?” he asked. “No need to be nervous Charlie. F*$%-ing Kumon,” said Mara calmly. [In 2008, Bulldog and I were talking trading, life, kids – seamlessly switching from one to the other. He started his career like most of us; a lucky break on some desk, young and dumb e

Hope all goes well… “Every economist I know just dusted off their dual PhD in virology,” said the CIO. “Is virology even a real word?” he asked, not waiting for an answer. “How can you take seriously their forecasts on China’s Q1 economic collapse, followed by the V-shaped Q2 recovery, Q3 slowdown and Q4 return to trend?” Scattered across his desk were crayon-colored zig zags, tracing out various sell-side prediction

A“Let’s start with what I’d tell a 25-year-old to not do with investment capital,” answered the CIO. He’d been asked how our youth should invest for 10-15yrs. “I’d tell them to not blindly follow their parents and grandparents as they pay ever higher multiples for a shrinking pool of equity assets,” he continued. In 1982 when Baby Boomers were coming of age, they paid a 6.6x Shiller price-to-earnings ratio for the S&

Hope all goes well… “I have come to the conclusion that there will be no fair trial in the Senate. I don’t believe the continuation of this process will change anything. It is sad for me to admit that, as an institution, Congress has failed,” said Lisa Murkowski, Republican Senator. “It has also become clear some of my colleagues intend to further politicize this process, and drag the Supreme Court into the fra

A“Financial markets have capitulated to the secular stagnation narrative,” said the CIO, high atop his prodigious pile. “And in so doing, they have tethered themselves to the wrong inevitabilities – to low interest rates forever, to asymmetric central bank reaction functions, to a negative bond-equity correlation,” he added, peering into the distance. “And now a financial system which is structurally intolerant of in

Hope all goes well… “Regardez! Regardez!” cheered some French children, pointing across the runway, a chilly, grey day. Air Force One lifted off, condensation swirling off its wingtips, leaving the Davos circus behind, Zurich’s airfield crawling in corporate jets. A few adults discretely turned to watch, trying hard to appear not to care. Nearby, a plane full of Chinese disembarked from their long-haul flight. News o

“Start with what we know for sure,” said Big Foot, creeping quietly through global markets, trackers desperate to front-run his every step. “If 100% of all investing is passive, then the information contained in market prices is meaningless,” continued the CEO of one of the industry’s largest investment firms. In 2009, assets in actively-managed mutual funds were 3x those of index-based funds/ETFs. In August 2019, US

Hope all goes well… “Do you solemnly swear you will do impartial justice, according to the Constitution and laws, so help you God?” asked Supreme Court Chief Justice John Roberts, presiding over the 3rd impeachment trial in US history. All one-hundred senators stood and said, “I do.” And so began the formal end to American’s faith that their politicians are capable of either impartial justice or upholding solemn oath

A“The Sanders/Warren risk is underpriced,” said the CIO. “And the decay on the trade is positive.” With Bernie rising impressively in the polls, markets should price the growing possibility of his nomination. Iowa’s primary is Feb 3rd. New Hampshire is Feb 11. By March 17th we’ll have 61% of the primary results. By April 28th we’ll have over 85%. “Let’s do the math,” he said. The S&P 500 is currently trading 18.5