Reasons for Hope
Four Challenges
The Gripping Hand
Resolutions, Unstoppable Progress, and Whigs

This week’s letter is the first part of my 2021 forecast. There is simply too much to cover in one letter, and today we’ll start with the most important factor, a known unknown, that I think will be the driver for 2021.

Before beginning, I want to make two points, one about my personal investment position and one about recent events.

First, when I read articles about myself, I’m usually called “bearish.” I never know whether to be amused or mystified. If you looked at my portfolio, you would see I’m almost fully invested, not in gold and/or survival stocks but a full range of assets. I have fixed income and private credit and I also participate in the stock market, but through active traders.

Then there is a smaller portion of my portfolio that is what I call the “long humanity” portion. Typically, technology of one form or another, and I don’t pay attention to volatility. I am long the “idea.”

So I am not bearish at all. I am quite optimistic. I may be currently bearish about long-only index funds at today’s unreasonably high valuations, and not terribly enthusiastic about bond funds at today’s low yields, but my portfolio and thoughts are quite optimistic. I just choose to express my optimism in different portfolios than mainstream managers usually suggest. I am a full-cycle investor, and we have not reached the conclusion of this current cycle.

Second, on this week’s events.

Thoughts from the Frontline is an economic/investment newsletter. I focus on larger macro themes. I try to not let my politics intrude, except when politics affects our portfolios and the economy, which is actually rare. The sturm und drang of the markets, as we certainly see now, tend to have their own rationale apart from politics.

As my friend David Bahnsen said, “Confusing what one WANTS to happen in POLITICS, with what WILL happen in MARKETS, is perhaps the most dangerous and avoidable mistake around. History can’t be any clearer.”