Chief Investment Officer @join_facet. Markets, Fed, macro. Hopefully informative, but no promises. Watch me on YouTube: https://xitter.cf/t.co/7XLPzkU9SN
Baltimore, MD
Joined May 2011
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They say that most amateur tennis matches are lost, not won. I.e., it isn't about hitting winners but about avoiding mistakes. Just keep returning the ball and it will work out.
I think that's more true in investing than many of us want to admit.
Really difficult job market to parse. Job growth is only running at a 0.7% pace over the last 6mo. That's solidly below any non-recessionary period historically. I know consumer spending has rebounded this year, but how sustainable is that w/o better labor mkt growth?
This is true of financial analysis too.
Tom Graff🔸 retweeted
I recently had a chat with a friend who's in the middle of his neurosurgery residency. Here's how it went:
Me: So how’s things going with neurosurgery? Must be pretty stressful right?
Him: Well… you’d think so, but it’s actually not too bad.
Me: What do you mean? Don’t you have to work insanely long hours?
Him: Well yeah… like over the past few weeks, I’ve had to stay behind for hours after the end of each shift to deal with emergencies. But hey ho, that’s just what you sign up for right?
Me: Haha yeah, but most of the doctors I know love to complain about their lives… you seem pretty chipper about it in comparison :)
Him: You know… I’ll be honest, sometimes I’m tempted to complain about stuff… but then I remind myself of something.
Me: What’s that?
Him: I worked really really hard to get into neurosurgery speciality training. I remind myself that the problems I have now that I’m inside it, are EXACTLY the problems I DREAMED for a few years ago when I was working to get in. While I was grinding away on my CV and doing interview practice, I was literally dreaming of the day where I’d get to deal with a neurosurgical emergency and potentially save someone’s life. So now that that’s happening for real, what’s there to complain about?
--
Note to self: next time you catch yourself complaining about something, pause and ask: "Is this a problem that a younger version of me was once dreaming about?"
$SPCX stock makes some sense, even at wild valuation, because there's a huge upside story about the space economy.
IDK who wants to buy bonds for a cash burning company with no near-term path to positive FCF.
If you buy this bond just bc it is "in the index" I can't help you.
IMV one of the reasons why $TSLA is so volatile is that all the true believers in the vision already own it.
Normie institutional buyers are turned off by the valuation & don't buy the dip.
So when some selling pressure emerges, it drops bigly. SpaceX could be similar.
SpaceX is now trading below the average trading price on post-IPO day. That means almost everyone who didn't get pre-IPO shares is at a loss right now.
Notable that Greenspan passes just days after Warsh's first FOMC. For those that don't remember, the trend of Fed communications began with Greenspan.
Before his tenure, the Fed didn't even announce their policy target or send our a press release.
Tom Graff🔸 retweeted
I went to a sell-side BDC conf yesterday .. great content and time well spent. Kudos to my host.
Managers were willing to answer tough questions which is much appreciated. $BXSL, $HLEND, $TSLX, $APOD
3 takeaways:
1. 1 BDC manager thinks the '25 vintage of loans is the worst due to the flood of capital competing at that time.
2. Most important metric to me is tracking portfolio turnover/repayment. Below 10% shows real weakness in portfolio. Loans extending way beyond maturity.
3. $OWL was the only manager that didn't allow me to attend their breakout session. Like Wemby walking off the court without shaking hands .. shows weakness.
Strong agree with Nick here. Hopefully Warsh realizes this nuance over time.
There's a difference between not telling markets your next move and not telling them how you make decisions at all.
Kevin Warsh, at his first meeting as Fed chair, did both.
Warsh got high marks for planting a flag on the Fed's 2% inflation target and for shearing the policy statement of jargon that had become a recitation of the obvious.
But he also stretched his objection to forward guidance into something broader, using it to sidestep questions about how the committee reasons toward a decision.
"It matters to have some sense of how this committee is thinking about how it goes about conducting this business," said JPMorgan's Michael Feroli.
Tom Graff🔸 retweeted
There's a difference between not telling markets your next move and not telling them how you make decisions at all.
Kevin Warsh, at his first meeting as Fed chair, did both.
Warsh got high marks for planting a flag on the Fed's 2% inflation target and for shearing the policy statement of jargon that had become a recitation of the obvious.
But he also stretched his objection to forward guidance into something broader, using it to sidestep questions about how the committee reasons toward a decision.
"It matters to have some sense of how this committee is thinking about how it goes about conducting this business," said JPMorgan's Michael Feroli.
Tom Graff🔸 retweeted
Fantastic response.
For those that argue the Fed should just set rates according to the 2-year yield, this is effectively it.
I find it refreshing and humble. The Fed should not see themselves as the centre of the universe.
How many of you have forgotten the Fed never used to have a presser after the meeting, let alone only a few for important dates, while we have one every meeting now?
These guys crave the grain of the pulpit more than they care for words of their speeches.
He may or not do a good job, but I think he's at least heading in the right direction.
What percentage of advisors who put clients into high-yield muni funds actually understand how concentrated the risks are in those funds? And how illiquid junk munis are? How once they become stressed they may as well be private credit?
Tom Graff🔸 retweeted
Not all change is bad. But, I think it is fair to conclude that President Trump got duped. If his attention is on a bunch of commissions, the balance of power shifts to the hawks on the FOMC.
Here's my overall FOMC takeaway:
🔼Warsh the speaker is a smooth operator. Stayed on message, seemed v comfortable up there.
🤷♂️Reforms are coming, I'm not automatically against them, TBD
⁉️That was the old Warsh we knew from 2008-2023. Clearly mtks thought he had changed. Nope.