Inflection points in narrative are highly important markers. Technically, the stock market is still in a bull market and no one can know when a deeper correction will unfold.
Peter C. Cavelti
For now, the prevailing narrative persists: motivated by the belief that central banks won’t allow a meaningful correction in equities and that there are few attractive places for money outside the stock market, investors feel that broad overvaluation is justified.
For most of us, the practice of charitable giving is not something that follows a defined set of rules, but rather something that continuously evolves. Peter Cavelti wants to share his journey with you-how he was first taught to give, how his perceptions and attitudes changed, and why he eventually ended up with a very small number of causes to support.
How risky is the broad stock market? It depends how you look at it, but there is plenty to worry about. To begin with, valuations are high by any yardstick; in the U.S. for example, the S&P500 cyclically adjusted price-to-earnings ratio has only been higher once—in the late 1990s.
We examine several recent events that threaten to overthrow the social, economic and political order. As a general rule, when the unknowns starts to crowd out the predictable, it’s best to be cautious.
So far, financial markets have welcomed Donald Trump’s victory with exuberance, focusing primarily on his promise of lower taxes and less regulation.
Because the recent fall in gold prices begs for a comprehensive reassessment, we subject the yellow metal to three tests.
The recent suspension of all Delta Air Lines flights highlights the drastic need to overhaul our badly impaired infrastructure. The eventual cost of overhaul will be high, and other areas of governance, such as health care, education and social welfare, demand equal attention.
We comment on the arrogance of the political class, the misguided and desperate actions of central bankers attempting to fix a broken system, Brexit and the future of Europe, and our conviction that investors have no choice but to resort to an approach of extreme pragmatism and flexibility.
The majority of people in the industrialized world feel disenfranchised. Their life appears to be in the hands of an unaccountable elite, where corporate, political and academic leaders collude.
The positive effect of central bank shenanigans is that equity values, for now, are being propped up, which boosts the wealth effect and in turn makes consumers a bit more confident.
Our view is that what lies ahead is unknowable and, because of that, the only strategy that makes sense is to keep an eye firmly on downside protection.