“When sorrows come, they come not single spies, but in battalions.” —Claudius, in Hamlet The Quarter in Review The second quarter was almost a mirror image—the same, but in reverse—of the first. March ended with the world shut down, investment markets in disarray, significant layoffs, and people fearing infection. As June ended, the world was...Read More

Over the long term, measured in years, the investment markets mimic the overall economy. We have seen many periods when the two diverged for a short time, sometimes significantly. And, admittedly, the word short is ambiguous. It could mean weeks, months, or, in some contexts, years. The greater a shift in the economy, the longer...Read More

“The essence of intelligence is the ability to predict. To plan ahead, we simulate the world. The optimal action taken minimizes the predicted cost.” -Yann LeCun, artificial intelligence pioneer Earlier this month, Berkshire Hathaway held its annual meeting virtually. Warren Buffett’s statements were as poignant as ever. Most interesting to us were his repeated, “I...Read More

“Let everything happen to you: beauty and terror. Just keep going. No feeling is final.”  — Rainer Maria Rilke The Quarter in Review That was not fun. We discussed in our prior quarterly commentary that we thought the party had gone on a bit too long and those remaining were likely to have a bad...Read More

This is the question we are all asking ourselves as the Federal Reserve throws money at Wall Street and the federal government throws money at Main Street. The market’s rise this past week has many hoping it’s a sign that recovery is imminent, and we’ll be getting back to normal soon. A look at the...Read More

“By suppressing volatility, central banks created a system unable to deal with bad news. Or to put it another way, leverage was built up on the premise that nothing bad happens.” — Andrew Lapthorne Given their swift plunge, the markets appear to many to be out of control, which increases the concern of investors. We...Read More

What is the headline risk? It is somewhat obvious, but the move of COVID-19 outside of China has shown that it has a higher probability of being a pandemic than it did before. The research we have reviewed shows that it is 20 times worse than the flu and can be transmitted much easier (not...Read More

“It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.” — G.K. Chesterton The Quarter in Review What a way to end the year! Global markets experienced a robust finish to 2019, with all but the so-called safe assets...Read More

Increasing Fragility “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.” -Nissim Nicholas Taleb Well-intentioned plans can bring unintended consequences. The world’s major central banks have been adding stimulus to the global financial system, hoping to lessen economic volatility and minimize...Read More

  “The investor of today does not profit from yesterday’s growth.” —Warren Buffett   The Quarter in Review Compared with previous quarters, the third quarter exhibited considerably more volatility with little appreciation. Most investment markets are showing signs of exhaustion due to continued uncertainty about trade wars, the negative interest rates in most developed countries,...Read More