Discipline
February 8, 2024 Good morning, So far this week, markets have successfully navigated two bond auctions and more Fedspeak without any hesitation. Except for small caps (down -0.63% this week), the rest of the major equity indexes have steadily marched higher, and on average are up another 60 – 70 bps (basis points 1bp=.01%) so […]
Quiet Calendar May Not Dampen Volatility
February 5, 2024 Good morning, Last week, we learned that the U.S. economy is stronger than the market had believed, and that the Fed is not in any hurry to lower rates. Stock and bond market volatility picked up, not unexpectedly. It’s been a while since we’ve seen back-to-back-to-back 1%+ moves on the S&P 500 […]
January 2024 Monthly Letter
Following the everything-rally that was the last two months of last year, performance across asset classes was mixed in January. Stronger than expected economic growth data and strong pushback from central bankers against the market’s overly enthusiastic expectation for rate cuts produced a tough environment for fixed income (U.S. Agg – chart below). Even though […]
December 2023 Monthly Letter
All years have surprises for the financial markets, in addition to what I’m hoping for you, I also hope that there are fewer surprises for markets this year than last. 2023 surprises were harder than usual on investment managers and consequently, fewer managers than usual were able best their benchmark indexes. There was the recession that never came, The Magnificent […]
November 2023 Monthly Letter
Nines across the board! November delivered in spades this year and saved almost every money manager’s skin in the process. The November column below is a stack of 9’s for equity indexes – an unusually high correlation. And +4.5% for the bond composite is arguably stronger than the equity moves on a relative risk basis. […]
October 2023 Monthly Letter
While normally placed at the end of the monthly letters, let’s flip the script this month and start out staring at the performance chart below. We’ll stare not in any contemplative way but rather to absorb the unadulterated message that 2023 has been a year of the few – 7 magnificent winners and 493 not […]
September 2023 Monthly Letter
The month of September lived up to its dark reputation as the historically worst month of the year. As you can see on the performance chart below, it was the worst month so far this year by more than double. And when combined with August, following a robust first half of the year, it turned […]
August 2023 Monthly Letter
Welcome back! Wherever you traveled to or even stayed home, I hope you had the opportunity to mentally get away and re-charge for the second (shorter) half of the year. Personally, I find re-entry after vacations to be challenging. The market seems to feel the same way. As I write this holiday delayed monthly note (9/6), both […]
July 2023 Monthly Letter
Investors’ feelings toward stocks (market sentiment) remained positive in July. A drop in inflation and resilient GDP data buoyed those feelings – maybe overly so. Stocks did well across styles and around the world. The 3.21% gain in the S&P 500 Index was beaten by large and small caps domestically, and International Developed and Emerging […]
June 2023 Monthly Letter
Since this is your June report, let’s depart from the usual monthly view and look back and ahead by halves of the year. The year began with almost record pessimism and consensus expectations for a late year recession, a decline in corporate earnings, and lower S&P 500 year-end targets. All of this against the backdrop […]
May 2023 Monthly Letter
Except for 5 U.S. companies, May would have looked just like February in the chart below – a column of red. Except for what is now called the AI complex: the five companies with leading edge artificial intelligence software and hardware (Apple, Microsoft, NVIDIA, Meta Platforms and Alphabet), May was a difficult month. It is possible, […]
April 2023 Monthly Letter
Economies: growth was as surprising in April as it has been since the start of the year – economic data showed that it was another positive month for the global economy, with growth remaining remarkably resilient in the face of higher interest rates. U.S., Eurozone and UK Purchasing Managers Index (PMI) surveys all beat expectations. […]