Just a reminder, there is an inverse relationship between the amount of people calling for black Monday and its likelihood of happening.

Everyone seems to be getting hella bearish. A couple questions I’m asking myself… if you have answers, chime in. 1. Has NDX ever had a true bear market immediately following a failed breakout of a 4 month long inverse head and shoulders breakout to new all time highs? 2. Have bear markets ever started when consensus within ~5% of new highs was that a bubble is popping? Honest question. I’m too lazy to have looked at this point. Seems unlikely.

That’s not bad luck. As @MebFaber will always remind you, Uncle Charlie made it clear. Liquor, ladies and leverage.

An advisor/CFP from another firm reached out recently and wanted a second opinion on how their investment committee was running the firm models. Realizing I’m playing Monday Morning Quarterback, here was the most glaring thing to me. The fee budget was all wrong. We often look at portfolios and want to manage costs, it’s a very reasonable thing to want to keep in check. I think we can (or should be able to) agree that there are fees worth paying, fees not worth paying, and subjective opinions in the middle. So, if you feel like a well diversified portfolio could have a total expense ratio of ~0.50 (don’t lose your shit Jack, it’s an example), what you should consider is where that budget is best allocated. The correct answer is different for everyone and depends on the objectives of the clients and the forward looking assumptions of the allocator/PM. However, I believe using your expense budget buying higher cost actively managed equity funds and making major factor bets (like long LC value + long Micro cap growth), leaving you with the option of just buying $AGG for your bond allocation is likely universally the wrong answer. Here is how I would prioritize. —> Good alts earn the fee budget first —> active managed fixed income has a proven track record of out performing. There is more available edge. —> international managers —> US value or Small Cap —> Core equity… and honestly, if you have fee budget left at this point, you may not have done the other ones correctly. Too each their own. Just my $0.02.

People really think Main Street isn’t buying private credit. I work mostly with Main Street folks that have saved a nest egg for retirement. We do a lot of consultations. I see a lot of portfolios. I talk to a lot of planners at other RIAs. Main Street absolutely has allocations into private credit. Lots of interval funds, CEFs, BDCs, or even the state street product that is $AGG + private credit. If they don’t have any of those, it’s not uncommon to see large portions of their bond allocations in Senior Bank Loans and CCC. In fact I’d say it’s less common to see $HYG in portfolios with the exception of DIY vanguard investors, who typically own a hefty allocation to the vanguard high-yield credit mutual fund. I rarely see TLT, but I see a fair amount of SCHP.

The bigger the base, the higher in space.

14-period RSI up top. Buy or sell this chart?

Credit Spreads are at a point where they have been finding resistance and seem to back off. A breakout would be pretty dangerous, so things might feel uneasy right now. Maybe even "risky".... What is the old saying about greedy when others fear?

Just want to reiterate my stance that real estate (especially residential) as an asset class sucks as a mid-term investment here. Those of you who chased at the end of the run circa late ‘21/early ‘22 or have purchased since, will almost certainly take a bath on total real return. I don’t see the macro headwinds improving. Everyone in real estate wants them too. If they do, we will have bigger issues at hand. Residential Real Estate must die on the altar of sacrifice (in real terms) if we are to avoid a nasty 4th turning. Also, it’s still “part of this complete breakfast” and it’s probably still worth having for utility or diversification.

This is 100% true. If you want to out earn your peers in this world, you must out work them. However, don’t confuse work as hours in the office appeasing the boss. A significant amount of time and effort should be investing in and developing yourself. That is what will accelerate competency and professionalism. Those will lead to value add. Value add leads to the real gains.

There is lots of noise and volatility in markets. It’s a feature, not a bug.

I share my “alpha” freely most of the time. Not because I think it doesn’t have value, but because there is a big difference between understanding and doing. The value of so much of what professionals do isn’t in the thesis. It’s in the execution. So just be transparent as possible and deliver on the execution.

Do I have any friends on here from NYC that’ll be around next week?

Zooming out on relative performance of Gold vs. S&P500. When the chart is going up, Gold is out-performing. When its going down, S&P500 is out performing. Yellow is when Nixon effectively ended the gold standard. Red is when interest rates peaked. Green is when central banks agreed to stop racing to the bottom on gold sales. By 2009, central banks we again net buyers. This year? Pain for gold investors, especially on a relative basis. Zoom in though, and it looks like $GLD is about to catch a bid right where it needs to in order to maintain its favorable out performance over time.

I really try to stay out politics these days, but this is objectively funny.

Many draw close to Jack Bogle with their lips, but few are committed in their hearts. In a large group chat for financial planners (mostly CFPs), this comment was just posted by a very respectable CFP. There is tons of engagement and it’s a lot of “well doing good math isn’t market timing.” And “adjusting a portfolio to achieve the same expected long-term returns with less risk is just prudent.” I don’t disagree but the conversation is nothing short of comical. Either buy the total market funds and move on, or admit you’re still making active decisions. Two things can be true at once. Cost can be important and active management can have merit.

The joys of living in Utah.

Well looks like I’m still not at risk of ever moving back home to WI. Truthfully a shame that states have laws infringing upon 2A rights. However, as a big advocate of states’ rights, I much prefer this than national level infringement. It’s my personal opinion that less stuff needs to be done at the federal level and more needs to be returned to state and local governments.

A tale as old as Utah itself. Is there a state that gets on hype band wagons and wrecked by Private Equity harder than Utah?