“Finance is often poetically just; it punishes the reckless with special fervor.”
– Roger Lowenstein
PIMCO – Risk-Off, Yield-On (6 pages)
PIMCO advocates for caution around higher-risk investments given higher interest rates and the challenging macro environment, but notes that there is a compelling case to be made today for bonds.
Research Affiliates shares why they believe the Federal Reserve is overly optimistic about inflation declining back to 2%. Two interesting notes:
- After inflation crosses 8%, it proceeds to higher levels over 70% of the time
- Once inflation is above 8%, reverting to 3% usually takes 6 to 20 years, with a median of 10 years
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Professor Campbell Harvey on the FTX bankruptcy, why it isn’t crypto’s Lehman moment, and why he still believes in DeFi. Link
John Authers on the set up for value today … and why it may have more room to run. Link
Ben Hunt delineates between stock buybacks for stock-based compensation and stock buybacks to return capital to shareholders. Link
“Apple, on the other hand, used 88% of its $550 billion in buybacks to shrink the share count and actually return capital to shareholders. Add on the $130 billion in dividends and Apple has returned >90% of its FCF over the past 10 years to shareholders!”
“History never repeats itself, but it does often rhyme.” – Mark Twain. Link
Natural resource firm Goehring & Rozencwajg walks through the history of energy and the current state of the energy transition (start at 6:38). Link
We estimate in 1900, it took nearly 70% less energy to meet a persons energetic needs than it did throughout most of history, despite the fact that per capita energy demand had grown by 50%.
Jan van Eck of VanEck Funds on Global Markets, Deglobalization, and Rising Interest Rates
[11/17/22 – 53 minutes]
Apple | Spotify | Google
Jan van Eck puts the current economic environment into historical context, discusses labor inflation, and shares his framework for launching ETFs.
Freakonomics looks at the psychology of fandom, the drawbacks of tying your beliefs to your identity, and how this manifests itself in politics.
Start at 35:19 when they interview CME Group Chairman & CEO Terry Duffy, who shares his take on the FTX bankruptcy and why he was skeptical of Sam Bankman-Fried when they met. Here’s a great teaser clip.
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