Good afternoon,
Some questions that have been looming this year have included:
- “I’m feeling dizzy at these heights. Should we get off this balloon, or maybe at least hover closer to the ground?” And;
- “Who’s that lady sitting on that cloud over there putting cream cheese on her bagel?”
Fair questions. It’s nose-bleedy out there, and the political environment is unusually difficult. I won’t pretend it’s a breeze remaining stoic. Then again, I’ve had some of these same angsts since the lofty recovery of 2009, when the S&P500 bottomed out at less than 1/6th of its value now. I’m glad I stayed in.
Hidden in the context of those questions this is a more ominous line of thought. Something like:
- “Is the world about to collapse into utter confusion and disarray? Or in other words;
- “Should I buy bitcoin?”
Again, I won’t mock these feelings, nor deny they’ve rubbed against me like a sharp brick in a poorly lit walkway. But, to actually bring things back to earth -- I’d rather build around proven, profitable businesses than something I can’t fully explain.
There will be market setbacks, large and small, just as there always has been. And we’ve always preferred to take modest risks and make modest adjustments all along, reflecting our best effort to read the changing market. And unlike the past couple of decades, inflation risk is now growling itself into the mix.
U.S. public pension funds:
A quick look at the asset mix over time of this important source of income for retired folks stateside.
Live from London: This chart (below) visualizes the “Financial Times Breakfast Indicator.” First of all, it makes me happy on so many levels that there is one. (I’m holding my breath for the Wall Street Journal Cat Food Index.) It’s a sort of morning-coffee-chat-promoting-inflation-gauge, and honestly, not a bad one. Anything that brings data to the kitchen table is useful.
From HQ:
- Picking apart Fed policy plans – It’s official, the US Fed is breaking up with its girlfriend, but (in its recent announcement regarding reduced bond purchases.) It… told her so gently she came away thinking everything would be ok. Or something like that. Let’s be friends.
- Supportive environment for U.S. equities – With U.S. equities on track for another week of gains, we spotlight some positive trends across the U.S. economic and earnings landscapes. See above regarding actual businesses.
- Regional highlights: Canada’s GDP receives a boost from services spending in August; Bank of England surprises by keeping rates on hold; China’s economy faces downward pressures.
More here, minus the tongue-in-cheek: Global Insight Weekly
Enjoy your week!
Mark