The top 10 stocks in the S&P 500 now account for more than 1/3rd of the value of the S&P 500.  Valuations in this group are vastly elevated compared to their historical levels, highlighted by Nvidia trading at a staggering 41 times sales.  It’s hard not to compare today’s environment in the large cap Technology...Read More

For over a decade, bonds offered a terrible value proposition as the Federal Reserve’s zero interest rate policy compressed yields, creating a major mismatch between opportunity and risk.  Investors weren’t being compensated for the substantial interest rate risks that they were incurring.  Remember, just two years ago, there were roughly $18 trillion in bonds that...Read More

This morning we woke up to the news that JP Morgan has purchased the vast majority of the assets and deposits of First Republic with the help of the FDIC bank-funded insurance fund.  This deal removes the last lingering overhang from the panic-induced bank runs that we saw in early March, which led to the...Read More

Investors and market participants often get told that the way to get rich is buying quality companies or properties.  Firstly, it is important to define quality.  For many, quality is conflated with credit risk.  For example, U.S. government debt is often seen as having the least chance of a default than any other bonds, mostly...Read More

The last two weeks have been about as volatile and fear-driven as we’ve seen since March 2020.  While these crises always seem existential at the time, the reality is that we get these periods of high stress just about every year, and the reasons are always different.  Just last year, the Russian/Ukraine war and rampant...Read More

Markets remain quite chaotic after the events of the past week lingering in the air.  As more information has come out, the more obvious the problem becomes.  You had 3 idiosyncratic banks that had grown deposits like crazy based on the backs of crypto and venture capital money flowing in.  These New Age banks, invested...Read More

A decade-long policy of virtually zero interest rates impacted assets globally and built the everything bubble.  It would be naive of us to think that the unraveling of this would not cause things to break.  Last week, we saw it occur with the implosion of two large crypto and venture capital-focused banks.  These institutions (Silvergate...Read More

Markets continue to exhibit higher volatility due to economic data that indicates that higher for longer Federal Reserve interest rate policies are more likely.  At TTCM, we view predicting macroeconomic data as being a rather pyrrhic enterprise, as success rates for even supposed experts, are far less than 50%.  By focusing on individual securities and...Read More

Volatility has begun to pick up in equity markets as bond yields have continued to creep higher, based on fears of higher for longer inflationary pressures.  I’ve warned before about being too aggressive in this environment.  Too many people expect equity markets to perform like they did in exceptionally low interest rate periods and that...Read More

The S&P 500 is now down 25% YTD, which puts it in the top 10 worst selloffs historically.  What is particularly unique about this bear market is that bonds have offered no help whatsoever, generating massive losses as well.  Even conservative investment grade bonds are down by 22% YTD, when the previous biggest loss on...Read More