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TTCM Newsletter

Our newsletter explores emerging trends and important news.  Stay current on the subjects that affect your money and investments.  Explore the wide range of topics in our newsletter by clicking any of the links below.

Inflation is Here

Today the Case/Shiller housing price data came out and it showed prices up nearly 20% YoY. Brent crude oil touched $80 per barrel and is on course for its best month since February. Treasury yields have risen quite dramatically over the last week, with the 10-year now above 1.5%, the highest since June.  Natural gas...
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Rob Arnott on the Opportunity in Value Stocks

Rob Arnott of Research Affiliates is one of the best investment strategists around. He wrote a fantastic article on the opportunity in value investing, so instead of going on about it, I’m just going to let you read it to get a good grasp of the opportunity in front of us.  Here was one quote...
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Shiller P/E Ratio Second Highest in History, China Evergrande Implosion

Global markets have sold off pretty hard to start the week.  Most of the narrative surrounds the Chinese property market and one of their largest developers, Evergrande.  China’s government is clamping down on leverage and demanding many industries to buy in, literally, to their social objectives via cash “donations”, cheaper housing, etc.  Both the Shanghai...
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85% of High-Yield Bonds Yield Less than Inflation Rate

  Interest rates are without a doubt one of the most important drivers of investment returns, if not the most significant.  Warren Buffett has mentioned in the past that there is almost a reverse gravitational impact of interest rates, in that lower rates tend to raise equity valuations.  Conversely, higher interest rates tend to pressure...
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Growth/Value Spread at New Marginal High

    The image above shows the S&P Growth/Value ratio. As you can see, this ratio has hit a new marginal high, to an all-time record.  This means that the valuation spread between growth and value has never been more extreme.  Interestingly, we saw a similar pattern occur in 2000, right before the Nasdaq began...
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Jobs Report and Quick Note on Valuations

Today the August jobs report came out and was quite disappointing.  The U.S. only added 235,000 jobs, which was well short of expectations that were for over 700,000 new jobs.  Fears regarding the Delta variant likely had a role in this big miss.  Many businesses I’ve talked to have expressed immense frustration about a lack...
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Update on Delta Fears and Podcast with Tim Travis and Tobias Carlisle

We are beginning to see a bit of increasing volatility in equity markets arise, as concerns around Covid-19 and the Delta variant have caused increases in positive test results and restrictions, albeit on a far smaller basis than what occurred last year.  We’ve been writing about the market getting a bit ahead of itself for...
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Crypto Selloff Gathering Steam- Be Wary of Too Aggressive of Promoters

Wall Street, like many other industries, is designed to sell you what you think you want. It is like a candy store offering you a wide variety of delectable offerings, that while tasty, might not be best for your health.  Good investments don’t need massive promotional campaigns to sell prudent investors.  Usually a paragraph or...
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Major Correction in Glamour Assets-Big Opportunities with Options

2020 was a truly unique year from a stock market perspective in that the most expensive stocks got more expensive, while the cheapest stocks got cheaper.  All of this was in spite of the year starting with the spread between value and growth already at near-record levels, with many astute investors betting on mean reversion. ...
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Inflation Running Hot and Major Update on Assured Guaranty’s Puerto Rico Exposure

Today the U.S. consumer prices numbers were released.  The numbers topped forecasts significantly, increasing by 0.8% from the prior month, reflecting gains in nearly every major category.  To put it into context, the gain in the overall CPI was twice as much as the highest projection in a Bloomberg survey of economists.  It is clear...
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 Hedge Fund Blowup and Rotation Shift to Value

We saw a little bit of volatility the last few days, as an overleveraged hedge fund blew up spectacularly.  It was one of the largest blowups in history (over $50 billion) and despite owning some pretty good positions, being leveraged 5-1 almost always assures disaster at some point, unless you are exceptionally lucky, and this...
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Rising Treasury Yields Sparking Volatility- Good News Long-Term

Volatility has come back into the equity markets, driven by rapidly increasing Treasury yields.  In fact, since the vaccine data came out towards the end of last year, Treasury Bonds are down 27.7%, meaning yields are up.  This has coincided with value stocks and financials going on a massive rally and outperforming peers, after a...
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Value Having Best Month Relative to Growth in 2 Decades

There have been a few interesting market developments the last few days.  10-year Treasury yields have increased to levels around where they were last year at this time, before the pandemic and lockdowns had really been felt.  The $1.9 Trillion stimulus package seems to be getting closer to getting done.  Inflation expectations are ticking up...
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Speculative Fever and a Lookback to 2001

The speculative fever seems to be at full blast as we’ve seen with the wild price moves in stocks such as Tesla, or alternatives such as Bitcoin.  Many people are applying pandemic-inflated growth levels into perpetuity.  One example, I find interesting is Zoom Video Communications (ZM).  The stock rose 400% last year, as the technology...
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Georgia Runoff/Higher Rates, Impact on Value Stocks

Last night’s Senate runoff in Georgia looks like it will be a clean sweep for the Democrats giving them control of the Presidency, House and Senate (with the VP holding the tie breaking vote). The margins in the House and the Senate are very small, so it won’t be easy to pass a major tax...
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