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TTCM Newsletter

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The 1st half of 2017 has been the polar opposite of the 1st half of 2016.  Where last year we saw massive market declines in January and late June, this year we have seen no material selloffs, and minimal volatility.  Investor sentiment has changed from primal fear in early 2016, to incredible market optimism and frankly greed....

This June, we observe the 10th anniversary of the beginning of the Financial Crisis. It was ten years ago when two Bears Stearns hedge funds went bust due to subprime mortgage bets, and the situation got progressively worse from there. If you don’t know your history, you are doomed to repeat it. I remember that period of time very well. I was living in Orange County, Ca, which was considered the mecca of subprime mortgage lending, when the consensus was that “housing prices can only go up.” As Mark Twain is purported to have said, “History doesn’t repeat itself, but it often rhymes.”...

While this optimism ultimately may prove to be valid if interest rates stay this low for many years to come and if earnings continue to grow, there is also a very real chance that many market participants will get badly burned. Most of this year's stock returns for the overall market are coming from Amazon, Facebook, Google, Netflix and Apple....

On May 4th, Assured Guaranty reported another phenomenal quarter of financial performance. Operating income was $273MM, or $2.14 per share in the quarter. These figures were up from $123MM, or $.89 per share in the prior year’s quarter. These returns were achieved despite the company adding an extra roughly $100MM in reserves for Puerto Rico, where they already likely have over $1 billion reserved all in. The most important numbers to follow on AGO are the non-GAAP operating book value and adjusted book value figures, which are the best proxies for intrinsic value for the company. Just from the end of 2016, operating book value grew to $52.51, from $49.89, or 5.25%. Adjusted book value grew to $71.51, from $66.46, or 7.6%. ...

Nearly a decade of unprecedented fiscal stimulus was bound to create bubbles. Last year, we had the great sovereign debt bubble where investors were paying countries and companies for the right to LOAN them money. As interest rates, have climbed, the foolishness of those participants has become more apparent as have their losses. Yield-desperate market participants have bid up just about every asset class you can think of. One of the most glaring bubbles is occurring in the junk bond market, where yields have plummeted to 5.7%, despite U.S. companies having taken on an extra $7.8 trillion of debt and other liabilities since 2010....

As I write this, the Dow has experienced its longest losing streak since 2011. Nearly 1/4th of the way into 2017, we are finally seeing some real volatility and more attractive investment opportunities are popping up each day. ...

Today I read an excellent article in the WSJ regarding the fact that stocks have tripled since their March 2009 lows, but savers are still being squeezed from low interest rates......

Warren Buffett's first rule of investing is not to lose money. His second rule is not to forget about the first rule. For those of you that have been with us for years, you have heard us talk a lot about maximizing risk-adjusted returns......

The first month of 2017 has begun with a very tight trading range for US stocks. Just as with the election in November, many market pundits were forecasting a collapse in stocks after the inauguration, but that has thus far failed to take place....

As many of you know, we started T&T Capital Management a little over 5 years ago now with the dream of being able to offer what we believe to be the best investment methodology at a reasonable price......

Well that was one heck of a week.  While I certainly was not smart enough to predict the results of the election, it has had a profound impact on my expectations for us as investors.  For the last 7 years, I’ve been one of the......

As a firm, our biggest position has been Assured Guaranty (AGO) for quite some time. We have written about it extensively and covered the attractiveness of the opportunity in great detail. Today was a great day, as we really got confirmation of the incredible progress that this company is making....

I’ve been warning all year about a clear and obvious bubble in consumer staples stocks.  The same can be said for utilities and many areas on the fixed income market.  This bubble has been built on the pervasive market sentiment that as long as the......

The biggest U.S. banks have now reported 3rd quarter earnings and they have all exceeded expectations.  2016 started so horribly for the big banks.  Poor economic data globally diminished the prospects of rate hikes, oil’s plunge created worries about the need for increased reserve provisioning,......

Reasonably strong economic growth has enhanced the case for a rate hike, likely in December barring significant negative developments between now and then.  While I’ll be the first to say that U.S. and global economic growth is sub-optimal, current Fed Policies are extraordinary and should......

As we sit in year-7 of a historic bull market, with earnings likely to decline for the 3rd consecutive quarter, the lack of a margin of safety in most stocks, bonds, and real estate is becoming painfully obvious. The Federal Reserve’s record-low interest rate policies have driven all asset classes higher, to levels where the risk of taking permanent losses of capital seems to outweigh the potential return potential....