In January, I wrote BCM was entering 2022 with a reduction in our tactical risk allocation, moving to neutral weight from last year's overweight position. That was a fortunate and timely call given the weak start to this year for risk assets. The rationale was the tailwinds that supported equity markets in 2020 and 2021 … Continue reading Are We There Yet?
Q1 2022 Investor Letter
BCM's latest Investor Letter is available to clients at bellwethercm.com/letters.
The latest inflation numbers came in at 6.8% year-over-year (headline CPI). That's the highest since the 1980s. What's more, the Federal Reserve capitulated from its "transitory" position and has signaled an acceleration of taper and interest rate hikes. Figure 1: US Inflation Unfortunately, this is the scenario I did not want to see but have … Continue reading Potentially Potential
The Show Must Go On
In October, the US printed weaker than expected GDP growth. The first reading was 2% year-over-year versus a consensus forecast of 2.7%, which itself was already well below Q2's 6.7%. This corroborates the "moderating growth" narrative of the past two quarters. That doesn't mean we're on the cusp of a double-dip recession. Actually, some economic … Continue reading The Show Must Go On
A Real Distinction
I wrote several times this year about my preference for international equities versus US. In August, I pointed out the selloff in Chinese stocks looked like an overaction. The Chinese market is up about +10% from its August lows. My timing was lucky, but there are still many long-term reasons to be bullish on Chinese … Continue reading A Real Distinction
Q4 2021 Update
QUARTER IN REVIEW Q3 was decisively less risk-on for markets. The global equity market (MSCI ACWI) gave back some gains but is still up +11% ytd. There was wide divergence between markets, notably emerging markets are down. Safe havens like US bonds and gold are also down for the year. Figure 1 Global Markets MACRO … Continue reading Q4 2021 Update
Red is the New Green
Many things about China don't make sense in the West. It's not just food and politics, but markets too. In China market quotes flash red on upticks and green on downticks. In the wake of the pandemic Chinese stocks led a global rebound with an outstanding rally few expected. But fortunes turned again quickly. The … Continue reading Red is the New Green
All Good Things
Back in January 2011 I wrote "I think one of the most attractive domestic investment opportunities is also one of the most detested - real estate." Obvious and easy in hindsight, but in 2011 many people were still licking their wounds from one of the largest real estate crashes ever. People were scared silly and … Continue reading All Good Things
Q3 2021 Update
QUARTER IN REVIEW In the second quarter risk appetite remained voracious among investors. Global equities reclaimed and surpassed highs reached in Q1 and the MSCI ACWI was up +12% year to date. Meanwhile, traditional safe havens remained under pressure. Gold was off nearly -12% at one point but clawed back some of that by quarter … Continue reading Q3 2021 Update
Bitcoin, Honesty, and Promise
Bitcoin had an outstanding 2020 that left most everything else in the dust. For perspective, the S&P 500 notched a respectable 16% price gain but looked like a rounding error in comparison. Figure 1: BTC vs SPY 2020 I last wrote about Bitcoin almost four years ago. As was the case back then I'm still … Continue reading Bitcoin, Honesty, and Promise
Same Old Dance Moves
Every decade or two financial markets enter a state of what Alan Greenspan called "irrational exuberance." These periods are characterized by markets that defy logic and reason. The time changes but the narrative repeats. "We've entered a new paradigm." "Old investing rules no longer apply." And of course, "Things are different this time." In the … Continue reading Same Old Dance Moves
Q2 2021 Update
NOTE ON UPDATES Starting with Q1 2021, BCM is consolidating its various update notes into a single "Quarter Update," labelled as "Quarter Update" under Categories. This reduces redundancy and makes updates easier to follow. QUARTER REVIEW Q1 started with a rally in risk assets, but equity markets are still off their all-time-highs notched in February. … Continue reading Q2 2021 Update
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