40% companies pulled guidance
Fade certainty
Disproportionate amount of the stock market rally the past 7 weeks has come on jobless claim days
Real unemployment likely over 20%
Majority of individuals reported to the BIS that they believed that their job loss was temporary
Pundits underestimating permanent damage
Permanent damage to corporate profits
Interest rates are not just a discount factor, but also a price signal of deflation
Many small businesses will run out of money in 2 weeks
Bear markets have 3 stages – sharp down, reflexive rebound, drawn-out fundamental downtrend
Dividend stability over yield
Dust off 1970s playbook
Gold supply grows at ~1% per year and currency is currently growing ~30% per year
40% of job losses were part-time
Private interest rates may not fall with treasuries
Prizes over patents is worth exploring
We are all going to be “preppers” now
20th century elections – who would you most want to grab a beer with
21st century elections – who do you least want to punch in the face
Shift in win probability from candidate with most Washington experience to candidate with the least Washington experience
Democrats will try to blame depression entirely on Trump
Both parties want to spend. Will either dominate house and office?
Yield curve control
Global supply chain arbitrage is over
US competing on China’s turf. State-based capitalism.
Fiat news – “It’s the presentation of opinion as fact”
The virus and how to think about the virus started in China
Behind a currency you have a nation, behind a nation you have a currency
Money-printing in tandem with de-globalization means portfolios must change
Cashless society
When central banks do their job you buy bonds. When central banks do not do their job you buy gold.
Expect capital controls
Experts are experts in their one field typically
Cost of capital must rise for retirees
Crisis is evident when you look at which states Trump and Clinton took. Coasts vs. midland
Xi is failing based on inability to keep Trump in line, Hong Kong riots, and concentration camps
A 90% recovery will not suffice
Expect “This week better than last week” rhetoric
We have never made a coronavirus vaccine
Cases spike end of week and ease off over weekends typically
Volatility in yields has gone way down
Major city populations may decline
Fiscal, fiscal, fiscal
The only thing that governments do effectively is raise taxes
Coronavirus may accelerate the green energy revolution
China to move towards more consumer-centric economy
Cold War 2.0
10 years ago US decided to dominate social media and China decided to take the AI and 5G route
If a currency is deserted, then the government loses the ability to monetize the debt
Digital currency disrupts EMs
Covid-19 could replace the war piece in a Fourth Turning
Fourth Turning adds all prior problems to a crux
Governments always become larger, more intrusive, and more authoritarian in a crisis
Inflation defunds promises
Covid-19 is jail without a fun story
Financial capital growth affects multiples
Fed may buy directly in auction if it gets “sloppy”
There is left and right tail risk
May be the crisis we needed to cause change
The way a downturn is entered dictates a recession or depression. Meaning pre-crisis balance sheets and cash flows
Social welfare is a growth industry
Additional debt reduces the productivity of new debt
Long term, low rates lead to a planned economy
Cutting hurts much more psychologically than increasing less in wealth distribution
BOE and Brazil CB have announced direct financing of government
Velocity of money necessary for hyperinflation
Pension with mandates of fixed income will likely fail
US pensions 60% funded
Dollar performs best in shrinking growth
Coal is hated
US Shale is product of QE
Can’t kill shale. Can only change owners.
Once radical mainstream is now redundant news
Trust was replaced with price.
Relationships were replaced with algos.
Biggest profits occur when you run the other way first
Some stocks fall through sector cracks
Tesla financiers are die hard too…
Capitalism leads to uneven distribution of prosperity. Socialism leads to equal distribution of misery.
If your company is protected on the downside, then your upside can be regulated.
Machines know everything about price and nothing about value.
A lion only must outrun the slowest gazelle. A gazelle must outrun the fastest lion.