(Image: A Satire of Tulip Mania, Jan Brueghel the Younger, 1640) “Your investment approach must account for the truth that there are going to be large drops in every asset class, and that ‘diversification’ alone is not enough (correlation goes to 1 at the worst times, like it did in 2008).”   – Daniel Taylor, October...Read More

(Image: The Breach of the Saint Anthony’s Dike near Amsterdam, Jan Asselijn, 1651) “For some of the older deals, there’s stress building up in portfolios that will manifest in different ways. And then the last step is you’ll see capital-D defaults.”   – Armen Panossian, CEO, Oaktree Capital Management, December 2023 Private credit was supposed to...Read More

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”   – John Maynard Keynes,...Read More

“A key economic and social phenomenon in the United States is the concentration of wealth and economic power in fewer hands, a development that has become compounded by the general reluctance in American society to acknowledge or discuss issues of economic or political power.”   –  J. B. Atleson, Maryland Law Review, 1985, P. 841 It’s...Read More

“The pairing of SBC and buybacks can reduce and increase agency costs. They reduce agency costs if executives and other employees are aligned with shareholders and the company returns cash to shareholders rather than wasting it on investments that destroy value. They increase agency costs if they are an inefficient means to pay employees and...Read More

“The traders hadn’t seen a move like that – ever. True, it had happened in 1987 and again in 1992. But Long-Term’s models didn’t go back that far. As far as Long-Term knew, it was a once-in-a-lifetime occurrence – a practical impossibility – and one for which the fund was totally unprepared.” – When Genius...Read More

“This is the longest period of practically uninterrupted rise in security prices in our history. The rise was more rapid than has ever been seen, and its speculative attraction influenced a larger part of the public than ever before. The psychological illusion upon which it was based, though not essentially new, has been stronger and...Read More

“Most institutional portfolios are badly out of balance. The returns of most institutional portfolios are 90+% driven by the return of equities, exposing them to a single adverse event which could last for decades, a poor performing equity market….not balancing the portfolio is so risky as to be imprudent.” – Bob Prince, Co-Chief Investment Officer,...Read More

“The nutshell is this: the old line economy stocks just don’t work because they have earnings and eventually rising interest rates impact earnings. New economy stocks have no earnings, so investors don’t see a need to exit.” – Wall Street analyst on CNBC, early March 2000 (said without irony)  | The start of 2021 for...Read More

“The biggest mistake of investors is to think that those markets that went up recently…are better markets, rather than more expensive markets.” – Ray Dalio, Founder, Bridgewater Associates  | We have been in the “Golden Age” of Passive Investing.  But nothing lasts forever. Just like all golden ages of times past (like Hollywood, or Detroit’s...Read More