Guild’s Basic Needs Index
Markets This Week — 21 April 2022
What is Happening In China? Shanghai, and many other Chinese cities, are once again under extreme covid lockdown conditions — the most stringent since April 2020, as China pursues its apparent “zero covid” policy. The images and videos percolating through to western social media are profoundly disturbing, and prompt a
Commodity Markets Signaling: This Is Not A Drill (Although Drilling Might Help)
Agustin Carstens, the General Manager of the Bank of International Settlements (BIS), spoke in Geneva a week ago — offering some soul-searching reflection on how the world’s financial authorities got the inflation story so terribly wrong. (The Bank of International Settlements is essentially “the central bank of central banks.”) We
Markets This Week — 14 April 2022
Earnings season is underway. As we wrote last week, we expect a down quarter for real earnings; of most interest to us will be the tone of management forward guidance. We are already hearing a lot of talk about rising costs and ongoing supply chain issues. We’ll be listening closely
The Earnings Recession Has Arrived: Is the Economic Recession Coming Next?
We say it often and we will say it again: earnings are the mother’s milk of stock prices. On a market-wide basis, a flat or declining earnings trend almost invariably accompanies a flat or declining trend in stock prices. This doesn’t mean that investors should go completely to cash (particularly
The Markets This Week — 7 April 2022
The points raised in our main post this week all suggest to us that the shelf-life of the traditional, indexed, 60/40 portfolio is close to expiration. Bonds were long thought to be — and long functioned as — counterweights to the equities in a portfolio, and would blunt volatility, since
The Fed, Inflation, and the Future of the Dollar
Many thanks to those who joined us on our periodic conference call on March 24. We will be editing the call into bite-sized thematic sections and providing the links to you in coming days, to watch or rewatch. If you would like a copy of the slide deck that accompanied
Markets This Week — 31 March 2022
Markets have staged a strong rally following the volatility that accompanied the start of the war in Ukraine. The S&P 500 has rallied 10% from its bottom, and the NASDAQ 15%. (The NASDAQ is still 10% down from its peak, and the S&P is down about 4% from its peak.)
When the Spectrum of Potential Outcomes Is Wide… Maintain Optionality
The tumult of countervailing forces at work in the global economy, and besetting investors, increases in strength day by day. Last week we wrote extensively on Russia’s invasion of Ukraine, and its implications for a host of global financial and commodity markets. The invasion itself surprised many seasoned analysts who
The Markets This Week — 17 March 2022
Our Upcoming Conference Call: Optionality Is King We have written before that the investment climate has changed dramatically. The cost of money is rising, and the risks of illiquidity episodes are rising. This is probably not the time to be locking yourself into anything, unless you absolutely must (e.g., you
Got Nickel? Asking For A Friend
There are years when nothing happens and years in which centuries happen. Carlos Fuentes We’ve seen a whirlwind of events in the past week. Here are some thoughts on the most important themes. Ukraine and the Fed Unfolding events in Ukraine of course represent a humanitarian catastrophe — and we
Markets This Week — 10 March 2022
Stay liquid. This is not the time to be locking yourself into anything unless you absolutely must (e.g., you need to make a 1031 exchange). In our view, current conditions and the speed of current developments indicate a cardinal truth for investing in 2022: liquidity and optionality are king. This
Reality Bites — With a Vengeance
The broad markets have registered significant, but constrained, volatility thus far in 2022, with the S&P 500 down about 8% from last year’s highs as of this writing, and the NASDAQ 100 down about 14%. Those figures mask a different, deeper, and more systemically important reality that mark the current
The Markets This Week — March 3
Please join us for our periodic conference call at 10 AM Pacific on March 24, 2022 — there will be a lot to discuss, and we welcome your questions. We’ll discuss ways you can increase your liquidity, flexibility, and optionality as the world moves into a more volatile and unpredictable future.
Lithium: Lifeblood For a Wired World
Hydrocarbon energy sources, even though they’ve been sidelined by investors during the ESG craze, still power the world, and are still essential for industry’s functioning and consumers’ wellbeing. Overhasty calls for a total decarbonization are coming up against the hard limits of reality, as ideology usually does. Besides the potential
The Markets This Week — February 24
Vladimir Putin pulled the trigger and has begun an apparently full-scale attempt to occupy Ukraine — or at least enough of it to create a permanent instability that will forestall its accession to NATO. We have long identified this issue as the lynchpin of Russia’s policy in its “near abroad.”
The Markets This Week — February 17
Positive and Negative Psychology In the Markets While most economists don’t believe a recession is in the cards, on average, until 2025, many market participants are beginning to fear otherwise. Their fears focus on the Fed, which is increasingly seen to be so far behind the curve in addressing inflation
