This is a nice overview of where we are and maybe where we are heading. Remember what I often said: watch what your competitors are doing, but not necessary do what they do. Here are some stick points that resonated with me:
“Many people are bullish for rate sensitive financial stocks.”
“creating a virtuous cycle by following a 1980s blueprint is highly unlikely.”
“There is a similar Value-At-Risk coming from heathcare, technology, industrials and financials.”
” if anything, banks have been over‐staffed and have over‐spent for years during a period of subdued activity.”
“Credit–like equities–is starting from a relatively high point in valuation this year and we expect the rising rate backdrop to provide a headwind. Retail- probably distressed this year.”
The letter, released Feb. 1st concludes:
“While America may or may not be made great again, there is no question that the rules are literally being rewritten and there is likewise no question that this process will be carried out in a flamboyant fashion. We do not plan to trade the tweets but we expect an increasing number of real and, even better, fake dislocations to create some extremely rewarding investing opportunities.”
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