Like a good attorney, we rarely ask a question for which we don’t have the answer. In the case of looking at sentiment in the economy and in the stock market, we like watching to get a feel for what our professional and individual investor clients are going through to see if it matches what we are hearing and seeing.
On My Radar: Handle with Extreme Care
“As I was waiting to be introduced, I got the latest headline from the North Korean government saying ‘a super preemptive strike will reduce the United States to ashes.’ So we have that to look forward to.” Ian Bremmer said as he began his presentation yesterday afternoon at the iShares Multi-Asset Summit in New York City."
Nearly 100 Days In, Is Trump Any Closer to Fiscal Reform?
Trump’s 100th day arrives next Sunday, April 29, and it would be disingenuous to describe his tenure so far as smooth sailing. He’s faced a number of significant setbacks and distractions, including federal judges’ smackdown of his two travel bans, a failure to repeal and replace Obamacare and an ongoing investigation into his administration’s possible collusion with the Russian government in the months leading up to the November election.
Lines in the Sand
In my 2016 year-end review, which went only to clients, I included a discussion of the use of subscription lines by closed-end funds in areas such as private equity, real estate, distressed debt and private credit. It’s my impression that their use has become fairly pervasive in recent years, and in response to clients’ requests and market trends, Oaktree has utilized subscription lines in some of its newer funds.
Getting Back to Basics: A No Frills Review of the State of Corporate Innovation
As investors, it’s easy to get caught up in headlines about things like Snap’s $23bn market cap or Tesla overtaking Ford and GM to become the most valuable US auto maker.
For Whom the Bond Tolls: Low Rate Beneficiaries in a Rising Rate Environment
Sluggish growth and aggressive central bank actions following the Global Financial Crisis pushed interest rates down to unprecedented levels, even negative outside the US, for longer than many would have expected.
Get Ready for Inflation! Lumber Logs a 12-Year High
As if you need more proof that inflation is finally starting to pick up, lumber prices rose to a 12-year high this week, supported mainly by expectations that steep duties will soon be levied on cheap softwood imports from Canada. Lumber futures rose to nearly $415 per thousand board feet on Monday, a level unseen since March 2005, soon after homeownership peaked here in the U.S.
Unabashedly Unaffordable: Global Housing Markets on the Edge
The housing market evokes a strong, and often emotional, reaction. This is usually because vested interests (owners, investors, speculators, politicians, lenders, real estate agents and others) can’t bear to think of the consequences of a decline in house prices. Politicians constantly talk about making housing more “affordable” but, by definition, this means lower prices.
I spoke with uber investor Frederick “Shad” Rowe, captain of Dallas-based Greenbrier Partners, last Thursday. Shad always has great investment insights, and his March letter to investors was no exception.
This Recovery Isn't Boom or Bust
Last Friday, payroll employment data, from a survey of businesses, showed the US created just 98,000 jobs in March. The consensus of forecasters had expected job growth of 175,000. The other jobs number, which comes from a survey of households, showed 472,000 new jobs in March.
Why Reinsurance Belongs in Client Portfolios
My firm recently approved a new alternative investment, one that until recently was only available through hedge funds, the Stone Ridge Reinsurance Risk Premium Interval Fund (SRRIX).
Many people don't realize that recessions are relatively common and frequent. Before 1930, recessions occurred equally 1 to 4 times per decade. After 1930, recessions occur once per decade about a third of the time and twice per decade about two-thirds of the time. If history is a guide, we should expect 1 to 2 recessions each decade.
What Could Possibly Go Wrong?
This time is different. Stocks will always go up. And pigs can fly. Given that pigs are highly intelligent, don’t bet against them. That said, investors might want to take at least the first two statements with a grain of salt.
Checking in on Some Trump Trades
Checking in on some “Trump trades.” The election outcome and resulting expectations for fiscal policy have caused several shifts in market leadership toward areas most sensitive to these policies. Policy is not the only factor to consider when evaluating these investments, but it is a very important one.
Private Equity Masquerade
March 10, 2017 was the 8th anniversary of the bull market in stocks that began in 2009. While the economic recovery from that same period has been labeled many things including “muddle-through”, “new-normal”, or other various metaphors suggesting anemia, the stock market recovery has been quite the opposite.