Research & News
Weekly Geopolitical Report – Nuclear Blackmail (February 13, 2017)
by Bill O’Grady (N.B. Due to the upcoming President’s Day holiday, the next report will be published on Feb. 27th) During the 1950s, in the early days of nuclear weapons, there was much discussion about the potential for nuclear blackmail. The world had recently defeated fascism but the problem of an aggressive and amoral leader like… Read More »
Asset Allocation Weekly (February 10, 2017)
by Asset Allocation Committee For better or worse, the Federal Reserve tends to conduct policy based on some variant of the Taylor Rule, which essentially means that the FED sets the policy interest rate based upon changes in the inflation rate and the level of slack in the economy. The rule suggests that if there is… Read More »
Weekly Geopolitical Report – Exit the Shark (February 6, 2017)
by Bill O’Grady On January 8, Akbar Hashemi Rafsanjani died of a heart attack. The 82-year-old cleric was a major political figure in Iran and his passing is a significant event for Iran and the region. Analyses of history usually follow one of two lines—the “Great Man” or the “Great Wave.”[1] The former postulates that the… Read More »
Asset Allocation Weekly (February 3, 2017)
by Asset Allocation Committee Although our current allocation models exclude emerging markets, we still monitor various emerging market nations for potential opportunities. A country that has been in the news recently is Mexico. President Trump has been targeting Mexico and the North American Free Trade Agreement (NAFTA) for Mexico’s persistent trade surpluses with the U.S. This… Read More »
Weekly Geopolitical Report – Future of the Euro (January 30, 2017)
by Thomas Wash January 1, 2017, marked the 18th anniversary of the induction of the euro, the European single currency. Once praised as the uniting force among European countries, the euro has become a source of populist backlash. From Greece to France, populist politicians have increased their political clout to the chagrin of the establishment.… Read More »
Asset Allocation Weekly (January 27, 2017)
by Asset Allocation Committee The consensus estimate for Q4 2016 S&P 500 operating earnings growth is 3.2%, which translates into a forecast of $118.35 per share for the S&P 500, using Thomson/Reuters data. Using a similar growth rate, the Standard and Poor’s calculation of operating earnings generates annual earnings of $102.16. Simply put, these two sources… Read More »
Keller Quarterly (January 2017)
Letter to Investors 2016 was full of surprises, and we expect that 2017 will be just as surprising. As we discussed in last quarter’s letter, the job of an investment manager is to navigate the world that is, not the world that we would like to have. Thus, rather than try to correctly predict what… Read More »
Weekly Geopolitical Report – War Gaming: Part II (January 23, 2017)
by Bill O’Grady Two weeks ago, we began this two-part report by examining America’s geographic situation and how it is conducive to superpower status. This condition is problematic for foreign powers because it can be almost impossible to significantly damage America’s industrial base in a conventional war with the U.S. In addition, it would be very… Read More »
Asset Allocation Weekly (January 20, 2017)
by Asset Allocation Committee After a short foray into emerging markets, we exited that position in our latest allocation. Prior to the Trump victory, we had expected the dollar to weaken which would have supported emerging markets. However, the dollar’s resurgence is a bearish factor for emerging markets, leading the Asset Allocation Committee to look elsewhere… Read More »
Asset Allocation Weekly (January 13, 2017)
by Asset Allocation Committee Last week, we reviewed Sebastian Mallaby’s recent biography of Alan Greenspan.[1] This week, we will focus on the issue of financial crises and financial stability. As noted in last week’s review, the financial system has evolved from a disjointed and diffuse system where banks could not establish themselves across state lines to… Read More »