Realistic expectations of investment returns

This is from Rowan Street’s latest investor letter (the link gives all letters, which are downloadable PDFs).

Rowan Street’s philosophy is to “hang on in there.” Maybe this is right, but this might be tested later this year.

Biden builds back bigger

Well …

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Crumbs

Lacy Hunt: still bullish after all these years

Lacey Hunt has produced a new quarterly report for Hoisington. Basically, he’s saying that there is loads of spare capacity, and the fiscal multiplier has actually turned negative (i.e. govts. deficit spending actively drains demand out of the economy …

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• Luke Gromen thinks that the Fed will have to choose between saving the dollar or the economy and, as is right, it will save the economy,
• Fifty three thousand estate agents work in the UK. One in six hundred employees are estate agents. Probably, the
• Everything is OK, chaps …

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Wrap

With the US on holiday, there was not much direction to the markets today.

• Generally, longer-term govt. yields were up,
• Energy mixed,
• most non-US markets down, although Europe managed a rally.

Chart for the day

M3, broad money, has risen by 400bln in the last year. This is …

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• every bull market has it’s shooting star, and for this one, it is undoubtedly Tesla,
• TSMC is going up

Kuppy’s Event Driven Monitor

Kuppy is a fixture on The Market Huddle podcast, and is always good to listen to. He’s started up a new venture, which …

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• gold miners have a higher free cashflow yield than tech stocks. Not sure exactly how measured, but it feels right,
• RAGA rage. A lobbying group to elect Rep. attorneys general has links to unsavoury companies. Colour me gobsmacked.

Wrap

Retail sales fell unexpectedly in Dec 2020. Online trade actually …

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• Heard the one about the wooden car? Wooden body, wooden wheels, wooden engine, wooden go! Now we are going to have wooden satellites,
• Amazing pop in Gamestop ($GME): up over 1000% since April,
• Interest rates look as though they are never going to get off the zero lower bound …

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• Palm Valley, a long-only small cap fund, explains why everything is too expensive and inflation is coming. You’ve heard the thesis before, but this makes the case with some élan.

Wrap

• News: Trump to be impeached a second time, just before Biden’s inauguration,
• inflation running at 1 …

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• Howard Marks has written another of his annual memos. I haven’t read to the end, but it seems to be about defining better what ‘value’ and ‘growth’ really mean. He points out that a company that is not capable of growth should not be considered to have ‘value …

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• This is a fantastic interview with el Erain. He basically says that he would not invest in anything at the moment. He is also highly critical of central banks.

• Lyn Alden has produced her Jan newsletter. She’s good, and interesting, but as nothing much has changed in the …

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