Commentary

Quarterly Market Commentary

It is said that a rising tide lifts all boats, and that goes for monetary tides as well. Watching the market every day, this is exactly what it has felt like; stocks just want to go up...fundamentals be damned.

Commentary

Spring Quarterly Commentary

This letter is one of the more difficult ones to write because things are changing so rapidly. We caution readers that we are not epidemiologists, but it is our job to try, to the best of our ability, to figure out what is going on, and that’s what we attempt to do with this letter.

Commentary

Winter Quarterly Commentary

The year 2019 was the complete opposite of 2018 across investment markets. Across the board nearly every asset class around the world, from bonds to stocks to gold to real estate, was down in 2018. 2019, on the other hand, delivered above average gains across those same asset classes.

Commentary

3rd Quarter Commentary

Listen... do you hear that? A bubble is popping. No, we aren’t talking about the stock market... well, at least not the stock market you’re probably thinking about. Generally, public companies have the economics to back up their lofty valuations, even if those valuations are, well, lofty. It is the market for private companies, specifically those backed by venture capital (VC), that looks truly bubblelicious.

Commentary

Summer Quarterly Commentary

In early 2007, delinquencies in subprime mortgages began to spike but few took notice. The first real headlines were made in June 2007 when two Bear Stearns hedge funds specializing in the area went down, but few were worried about Bear itself.

Commentary

Spring Quarterly Commentary

A near mirror image of the fourth quarter, the first quarter began with the stock market rocketing higher in a nearly straight line. In one of the strongest quarters since the current bull market began in 2009, it managed to largely erase the carnage of the prior quarter and index levels are now back at all-time highs.

Commentary

Winter Quarterly Commentary

We would like to ring in the new year and provide our predictions for the U.S. economy in 2019.

Commentary

Summer Quarterly Commentary

Since we are necessarily in the predictions business, this letter offers our expectations for equity market returns. We admit our crystal ball is typically cloudy when it comes to what markets will do in the near term. While nothing is ever for certain, we can better view the potential for longer-term stock market returns from a couple of perspectives.

Commentary

Winter Quarterly Commentary

Sir Isaac Newton’s magnum opus, Mathematical Principals of Natural Philosophy, established the laws of motion and universal gravitation which underpinned how scientists thought about the physical universe for centuries. Newton did not cover the laws of financial gravitation, which appeared not to apply in 2017 as the stock market soared to another 22% return...

Commentary

3rd Quarter Commentary

Though the seething pits of humanity at the New York Stock Exchange and Chicago Mercantile Exchange, with their traders all shouting at each other, are largely things of the past, that is still what markets basically are: a bunch of people shouting different things. A market price is the price at which the same amount of people are buying as are selling.

Commentary

1st Quarter Commentary

While it might sound obvious, we find it important to remember that knowing about the past only helps you place bets on the future to the extent that the future is like the past.

Commentary

Winter Quarterly Commentary

“We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.” - Abraham Lincoln, 1809-1865 16th President of the United States

Commentary

3rd Quarter Commentary

It is relatively common knowledge that when interest rates decline stocks ought to rise, and they typically do.

Commentary

4th Quarter Commentary

When it comes to the stock market, it is clearly a time for much doubt, but perhaps also heroism. As we write, the market is in the midst of a nasty sell-off, the worst start to a year in U.S. stock market history, with every sector down for the year with the exception of utilities. Global stocks have fared even worse, losing $14 trillion since peaking last May and more than $2 trillion during the first week of January alone. The beginning of the year is an especially inauspicious time for a stock market plunge as markets often trend in the direction of the year’s first week.
Commentary

3rd Quarter Commentary

The third quarter produced the worst return for the S&P 500 Index in four years, wiping out the prior year’s gains. Peak to trough declines from 2014-15 index highs to recent lows were even greater.