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Perspective
You might think that there are bearish comments coming based on the chart above, but we will try to strike a tone of optimism at a time where few seem capable of it!
The S&P 600 chart above measures the valuations of small publicly listed companies. You will note that levels this low haven’t been seen since late 2008…not a particularly auspicious time for markets.
That said, the following years proved incredibly favourable, as a combination of rising earnings and expanding valuations led to one of the greatest compounding opportunities of all time. We may not be through our current bout of volatility, but these types of drawdowns tend to increase future returns dramatically. We think it is important to focus on that very important silver lining as we work our way through the inevitable negative headlines of the coming weeks
Lunch With Warren Buffet – With Ted Weschler
A rare interview with Warren Buffet’s protégé Ted Weschler. The level of humility is impressive for someone managing such a large pool of capital. If you have an interest in the Berkshire Hathaway story, this is definitely worth a listen. The next generation of managers is getting more and more spotlight, and they are a suitably impressive bunch.
There are two people in this room that don’t have an MBA. You, and me.
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Joe Zidle: The End of Liquidity Is a New Beginning for Alpha
A great piece challenging the role of pure market exposure in a portfolio. As liquidity recedes and inflation may be structurally higher, the argument for niche strategies that aren’t reliant on the entire market rising improves. Lots of interesting data here.
Good news was good for returns. Bad news was even better. And the worst news of all—a global pandemic—proved the best environment of all for market returns as each recession begot lower rates and easier monetary policy. Now that central banks around the world are on track to hike rates more than 250 times this year while shrinking their balance sheets, those same beta exposures won’t similarly outperform.
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Amazon is Running Out of People to Hire
The strategy of churning and burning through employees is proving costly in an era of record employee transitions. We are somewhat skeptical of the overall thesis, as inflation likely drives a portion of the population which left the workforce in the pandemic back into the market. Still, a very interesting analysis of the challenges in running a company this large.
But attrition at Amazon’s facilities in the area (Phoenix) grew from 128 percent in 2019 to 205 percent in 2020, as the pandemic upended labor markets and online shopping boomed, putting pressure on fulfillment center employees.
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Why the Return to Office isn’t Working
An exploration of the steadily rising number of allowable “work from home” days in the post-pandemic world. This is an issue which is so much more nuanced than the typical coverage. Requirements and desires vary across profession, geography, and family status. We are on a long road to the new steady state.
Solving the office conundrum is not easy, and in all likelihood it will be impossible to make everyone happy. But it’s important to remember that going to the office never really worked for everyone, it was just what everyone did. Now, two years after the pandemic sent office workers to their living rooms, their employers may have a chance to make more people happy than before.
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Home | 2022 | 2021-20 | 2019-18 | 2017-16