When we published the first edition of our Bubble 3.0 series in December 2017, the S&P 500 had ballooned to then-record-highs. Most pundits at the time turned a blind eye to some of the more concerning aspects of the market, and our view of a pending implosion was very much in the minority.
This Wednesday, Fed-head Jerome Powell announced the Federal Reserve’s third rate cut of 2019. On the same day, economic data reports signaled continued (but slowing) GDP expansion, buoyed by strong consumer spending and a resilient labor market.
In late-July, we published the musings of famed investor and hedge fund manager Ray Dalio in a piece titled “The Instant Classic,” which came by way of another widely admired source, Mike O’Rourke author of The Closing Print. As the title suggests, the work is one of the transcendent pieces that will likely be included in the “Financial Commentary Hall of Fame” when it’s all said and done.
For over 30 years, I have read every Barron’s Roundtable edition interviewing many of the world’s foremost money managers. Past and current members have included Peter Lynch, Mario Gabelli (still a participant), Bill Gross and, though not nearly as well known, one of the best stock pickers extant, Meryl Witmer. Accordingly, it was with great pleasure that I discovered a former member of the esteemed cohort is also an EVA reader.
In his popular book, Misbehaving: The Making of Behavioral Economics, Richard Thaler suggests that, “Many people have made money selling magic potions and Ponzi schemes, but few have gotten rich selling the advice, ‘Don’t buy that stuff’.” In fact, it can be downright unpopular to be the adult in the room when easy money seems to be falling from the skies like raindrops in Seattle in January.