Game changer
“If the low-interest-rate era has ended, it may well mean that the secular trend has changed from the megacap growth stocks, which dominated from 2014 to 2021, to ‘everything else’—such as value stocks, small-caps, commodities, and international equities. This also happened during the original Nifty 50 era of the early 1970s, and again during the tech boom of the late 1990s…. In the past 10 years…there was no reason to be an active investor. There is every reason to be an active investor for the next five or 10 years. That’s where the game is going to be.”
– Jurrien Timmer, director of global macro at Fidelity Investments. Read more at bit.ly/3lWpmm4.
Dry powder
“We saw great excesses to the upside when people thought it was ‘flawless,’ we will see great excesses to the downside when people think it’s ‘hopeless.’ So now is a good time to sit on your hands and try to get ready for the opportunities when they come.”
– Howard Marks, co-chairman of Oaktree Capital, in a 1/30/23 interview with The Market. Read more at bit.ly/3IqT8qL.
Settle in
“So now people are starting to talk about the ‘no landing’ scenario – a situation in which the plane just continues to fly without ever landing.”
– Cullen Roche, in his Pragmatic Capitalism blog on 2/15/23. Will the Fed be able to engineer a soft landing for the economy? Roche believes “the potential for a ‘muddle through’ year looks like the most likely outcome.” Read more at bit.ly/3YIBfup.
Never count the consumer out
“While macroeconomic and geopolitical uncertainty persists, consumer spending has been remarkably resilient.”
-Mastercard Chief Executive Michael Miebach, quoted in a 1/26/23 The Street article. Read more at bit.ly/3Hc60jI.
Off the mark?
“Target-date funds solve for a lack of investor sophistication or lack of time. But they don’t ask a lot of questions other than ‘How old are you?’”
– Daniel Yerger, a financial planner in Longmont, Colo., quoted in 1/19/23 article in Barron’s. Read more at bit.ly/3J9Hpij.
The price investors must pay
“One of the first written pieces about stock market uncertainty was Louise Jean-Baptiste Alphonse Bachelier’s PhD thesis, in 1900. He observed that things look pretty random over short periods. This idea has stood empirically strong for 120+ years.”
– Rubin Miller in a 2/22/23 post on his blog, Fortunes & Frictions. In investing, as in life, he argues, uncertainty can be traced to a lack of trust. Read more at bit.ly/3XYGlBn.
