The rising sentiment towards a Fed rate cut seems premature—even for September 18th. Financial conditions are easier than they have been in two years. The S&P 500 is still up by 14.5% for the year (just below the Nasdaq’s 2024 return of 15.6%), but it sure doesn’t feel like it, even though it remains well above average returns over the last 15 years.
Being an economic thinker rather than a political one, I will say that all these elections seem to have one thing in common—voters are rejecting the status quo of imposed statism. They are rejecting the policies of excessive indebtedness and deficit sending. Voters know first-hand that slow growth and higher prices are pushing them further and further behind in their quality of life. The famous “misery index” is rising everywhere from Beijing to Tehran, Moscow to Paris, Berlin to London, and Washington. Most major countries across the world are in danger of debt death spirals. Voters everywhere know government bureaucrats are asking them to sacrifice more than they can bear. They want change.
77.25% of the Perry Capital portfolio yields 5.09% with principal guaranteed. I sold my short 25% Treasury
positions
exposure.
75% of the Perry Capital Portfolio remains in AAA-rated, very short maturity, and very liquid securities.
I remain extremely underweight the equity market because the valuation metrics of risk assets are not
discounting for persistent inflation and a slowing economy to the degree necessary to be attractive.
“To contract new debts is not the way to pay old ones.” Read More »
I remain 75% in liquid cash investments, which have a guaranteed yield to maturity of 4.625%. Given recent
events, and the expectation of forthcoming stimulus, volatility remains extremely elevated, sentiment is
schizophrenic, and investors are fearful.
“Capitalism without failure is like religion without sin. It does not work.” Read More »
I still have small positions in Silver and Bitcoin.
Volatility is extreme, risk is high rewards are low. Pick your spots. This is not one of them.
“The greater the obstacle, the greater the glory in overcoming it.” Read More »
The most significant risk facing investors is the Fed’s march towards a restrictive monetary policy.
Indeed, there are others: the invasion of Ukraine, lockdowns in China, the crypto fallout, and even the
nature of free speech in America as encapsulated in the Twitter saga. All make top headlines.
“Often the difference between a successful person and a failure is not one…” Read More »