“If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation” – Charlie Munger, Vice Chairman of Berkshire Hathaway (99 years old) We’ve been saying for a while that today’s market landscape is shaping up to be quite different from the past. We said it first in...Read More

Prescribed Fire White oaks are large, deciduous trees native to eastern North America. The wood from the white oak is highly valued for its strength, durability, and resistance to decay and insect damage. It is also appreciated for its lack of porosity, making it vital to the spirits industry, which ages bourbon in oak barrels...Read More

From The Perfect Storm Our investment objective is to produce above-market, risk-adjusted returns—over an investment cycle—at a lower level of experienced risk while mitigating the declines our clients experience over that investment cycle. Over the course of nine years, we have—to date—achieved it. [Past performance does not guarantee future returns.] Our method is to detect...Read More

It is hard to shake a stick without hitting an economist these days. And given how lousy a job they have been doing forecasting the economy, we would argue that a giant stick is needed so that we can hit more of them! We want to focus on two economists with different ideas, Thomas Malthus...Read More

We would like to introduce Nobuya Nemoto, our guest for this month’s newsletter. Nobu has been a great resource to Auour for the past year as we all navigate a unique economic landscape. “Inflation is the tiger whose tail central banks control,” according to the ex-Chief Economist of the Bank of England (forced to resign...Read More

“It is more sekyr [certain] a byrd in your fest, Than to haue three in the sky a‐boue.” – John Capgrave’s The Life of St Katharine of Alexandria, 1450 The last four months have seen investors move from a futurity (new word for us) approach to a more here-and-now approach. The prices of companies focused on...Read More

“So I just don’t think a lot of people have seen this. When’s the last time anyone here has seen interest rates up 2 years in a row and 6 or 7 times this year and 4 or 5 next? Nobody has seen that. Nobody has seen a lot of a lot of things that...Read More

Two thoughts from Oliver Burkeman (h/t @jposhaughnessey) “True security lies in the unrestrained embrace of insecurity—in the recognition that we never really stand on solid ground, and never can.” “Uncertainty is where things happen.” Over the past two long-drawn-out years, we have discussed the idea that market participants swing between uncertainty and complacency. We have...Read More

The world’s addiction to low interest rates reminds us of the Sirens of Greek mythology who allegedly (never convicted) inhabited an island between Aeaea (and you thought Auour had a lot of vowels) and the rocks of Scylla. Their sweet songs (low interest rates) attracted sailors (borrowers), only to lead them and their ships to...Read More

In our May 2021 newsletter, Breaking Windows, we discussed inflation and its impact on the investment markets. We said the primary drivers of inflation were the large stimuli injected unevenly into the global economic system through governments and central banks. That newsletter focused on one side of the equation—demand—and in it we noted: “There is...Read More