Naysayers and doubters will eat crow pudding.

Naysayers and doubters will eat crow pudding.

“Pie makes everybody happy.”Naysayers and doubters will have their day, but not until they’ve eaten their crow pudding for the holidays.  In large doses no doubt.  Market averages continue to reach record highs and look poised to go even higher.  All the discussion...

Tea leaves predicting little chance of recession

Tea leaves predicting little chance of recession

“I don’t look to jump over 7-foot bars.  I look for 1-foot bars that I can step over.”With most of the economic tea leaves predicting little chance of an oncoming recession there are few reasons the equity market should not continue higher.  New highs seem to be a...

8 New Funds in our models

8 New Funds in our models

“You have to believe in your process. You have to believe in the things that you are doing to help the team win.”With the Salt Creek fourth quarter re-balance completed on Friday, the new allocation should continue to benefit from ongoing market gains.  The portfolios...

Keep human capital diverse from financial capital

Keep human capital diverse from financial capital

“My interest is in the future because I am going to spend the rest of my life there.”As financial advisors your role is critical to the success your clients seek.  Investing for future needs is the biggest challenge faced by investors and their advisors. In order to...

It’s alpha our clients pay for…

It’s alpha our clients pay for…

“It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble.”The debate surrounding active versus passive portfolio management has been with us a long time.  Get used to it.  Just like an argument...

Lows of June vs Highs of July

Lows of June vs Highs of July

“Looking ahead we see the stock market continuing to reach progressive new high levels as we move throughout the rest of 2019 and 2020.”As Salt Creek prepares for the 4th quarter re-balance, there seems to be little clarity or consensus about which direction markets...

So, why haven’t banks expanded their balance sheets?

So, why haven’t banks expanded their balance sheets?

“The main problem with fiscal policy is that it is too tempting.  Keynes’s idea was to use it as a counter-cyclical tool- on then off.  But once governments start using fiscal policy for economic expansion, they just can’t control themselves- fiscal policy is the...

Repo market, what you don’t know…

Repo market, what you don’t know…

“Doublethink means the power of holding two contradictory beliefs in one's mind simultaneously and accepting both of them.” Last week’s housing numbers helped remove some of the market’s recent fears about slower growth for the economy.  Lower interest rates seemed to...

United Auto Workers confirming tight labor market.

United Auto Workers confirming tight labor market.

“To labor is to pray.”The recent actions of the United Auto Workers are beginning to finally confirm that the US labor market is tight.  Maybe this group of workers have discovered that some of the bargaining power has finally shifted in favor of them after a long...

Fed is data dependent?

Fed is data dependent?

“Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts.”The FOMC’s job never seems to get any easier.  Pressure to cut rates once again is building as domestic and foreign forces continue weighing in.  Yet real rates are or very...

Predicting the next market cycle

Predicting the next market cycle

“The problem with putting 2 and 2 together is sometimes you get 4 and sometimes you get 22.”The capital market and business cycles are highly variable and certainly unpredictable in terms of their duration and frequency.  Trying to predict the when and why of either...

New forward-looking expected returns?

New forward-looking expected returns?

“Rebalancing is one of the thorniest questions in asset management.” There are several objectives for any strategic asset allocation strategy.  Well known are the benefits and characteristics of this investment blueprint. Diversification, risk reduction,...

High Valuations and Declining Earnings… Trouble Ahead?

High Valuations and Declining Earnings… Trouble Ahead?

“The prediction of economists are often dismally wrong because they’re based on theory instead of reality.”July’s last day Fed actions has reset the stage for increased market drama with more likely to come.  Did last month’s rate cut signal that something is wrong in...

25 Bps… No takebacks! Ooh it was a mistake.

25 Bps… No takebacks! Ooh it was a mistake.

“The system of unlimited liability is that which fosters the most speculative management.  It is a system which makes bankers out of men who have nothing to lose…”Having opined in the past about the Fed’s role in causing recessions, I won’t be blaming restrictive...

OMG… China is manipulating its currency.

OMG… China is manipulating its currency.

“China is a sleeping giant.  Let her sleep, for when she wakes she will move the world.”If the world was expecting China to retaliate against the US’s recent increase in tariffs, then their move to weaken the yuan through the 7 per dollar level seems to be a move...

Why asset allocation?

Why asset allocation?

“Every good cause is worth some inefficiency.” Why asset allocation? Economist Paul Samuelson (1998) suggested the dictum that equity markets are “micro efficient” but “macro inefficient”. Jung and Shiller created a working paper in November of 2002 that validated...

…corporate debt is just one notch above junk status!

…corporate debt is just one notch above junk status!

“In every life, there comes a day of reckoning - a time when unsettled scores demand retribution, and our own lies and transgressions are finally laid bare.” Part of the answer has been revealed.  Last Friday’s job report gave evidence of a strong job market.  Over...

Here’s what they’ll know then that they don’t know now.

Here’s what they’ll know then that they don’t know now.

“I believe in the Golden Rule - The Man with the Gold... Rules.” The Fed’s decision not to cut rates last week had to be somewhat disquieting to President Trump and his advisors. The rhetoric out of the White House over the past few months has repeatedly called for...

The power of asset allocation

The power of asset allocation

“From a purely mathematical perspective, in the absence of strong assumptions about….risk, return, and correlation- holding equal amounts of all investments in the investment universe is, in fact, optimal.” It has been widely noted that May was a tough month for the...

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