We have the luxury, the honor, of speaking to a lot of individual investors here at Alhambra. Whether they are clients or future clients (optimism is my default condition), the most common view of stocks is that they are overvalued and a fall – a large fall – is inevitable. And there is no stock that embodies that view more [...]
This seems an opportune time to review the difference between Strategy and Tactics. Strategy and tactics are how we achieve our goals and objectives. In our specific case, the goals and objectives are financial in nature. Strategy is the path we will take to get from where we are today to where we want to be tomorrow; it is the [...]
The economic data over the last month continued to improve but the breadth of improvement has narrowed. Additionally, while most of the economic data series are still improving, the rate of change, as Jeff pointed out recently, has slowed. I guess that isn't that surprising as the initial phase of the recovery comes to an end. 2nd quarter was a [...]
Anyone who follows Alhambra knows that we keep an eye on the dollar. It is a very important part of our process of identifying the economic environment. A rising dollar, when combined with a falling rate of growth, can be a lethal combination. That was the situation in March and of course during the financial crisis of 2008. So the [...]
Many of the weak dollar trends I noted in June’s update have moderated - even as the dollar has weakened further. US stocks surged over the last month, with growth indices leaving their value counterparts in the dust…again. About the only exception on the equity side was China, which outperformed for much the same reason as US growth – technology [...]
One of the advantages we enjoy here at Alhambra is the opportunity to interact with a lot of investors. We talk to hundreds of individual investors on a monthly basis, giving us a front-row seat to everyone’s fear and greed. Economic data tells us about the past, which isn’t particularly useful for investors focused on the future. Sentiment, though, is [...]
If the recession was the first "shoe to drop", what's the second...or third? The shock of the self-inflicted COVID recession is behind us. What we're all wondering now is what comes next? Will the economy recover to its previous state? Something better? Something worse? That will be determined by the second and third-order effects and they are already starting. Our Special [...]
Our Fortress strategic asset allocation includes 5 distinct asset classes: The Fortress allocation has historically produced better risk-adjusted returns than the traditional 60% stocks/40% bonds allocation. The bond allocation is varied to adjust the risk of the portfolio. A Fortress allocation with 20% bonds has produced a higher return with lower standard deviation (volatility) than the 60/40 portfolio. In a [...]
Most Long-Term Trends Have Not Changed A lot has changed over the last 4 months since the COVID virus started to impact the global economy. Asia was infected first with China at ground zero. Their economy succumbed first with a large part of the country shut down to a degree that can only be accomplished in an authoritarian regime. The [...]
The stock market has recovered most of its losses from the March COVID-19 induced sell-off and the enthusiasm with which stocks are being bought – and sold but mostly bought – could lead one to believe that the crisis is over, that the economy has completely or nearly completely recovered. Unfortunately, other markets do not support that notion nor does [...]
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