Please enjoy our latest Quarterly Letter. We hope you find it informative (and interesting), and that it provides you with insight into the way we view markets and construct portfolios. Feel free to pass it on to others who also might find it valuable.
Thank you for your continued confidence and trust!
I could begin this piece with defining what a “correction” is in a few different ways, either through an economic lens or by measuring the distance that the price of an index needs to fall from peak to trough. However, those have already been blasted to you by every financial news site over the last few weeks. Plus, they’ve only refreshed you with the definitions after the correction has already occurred, which gives you no benefit other than to distract you from your work, and increase your heart rate.
My goal is a bit different in that I aim to slow your heart rate, and tell you to get back to work. Most people already know what a correction feels like, but what does one actually look like? And can a visual perspective help calm our fears of a potential worst case scenario event seemingly right around the corner. In all likelihood, that event is in the next 3-12 months and market participants are merely being prudent, and collectively pumping their breaks ahead of this unknown future event, if it were even to occur at all. That’s the beauty of a free market. No single piece of news is going to sway everyone at once, or even in the same direction, but will be weighed by all participants (the “market”) over the course of a full business cycle. But I digress... Read More >