Weekly Observations for 1/26/2018 — Howard Marks

The highlight of the week is Howard Marks’ latest client memo, released on January 23rd, just a few days after my own quarterly client letter. Howard Marks is a name you’ve likely heard from me before — I highlighted some of his thoughts for navigating a low return environment in my October 2017 letter and reiterated these in my latest letter, and I frequently recommend his book “The Most Important Thing” to clients and advisors wanting to better understand my investment approach.

Marks’ January 23rd memo, which prints to a little less than 10 pages, provides a refreshingly balanced and honest assessment of the current positives and negatives in the U.S. economy and markets, and a reasonable investment response.

A few other observations this week…

–  720 Global published a very nice chart showing the current and historical value of the stock market, adjusted for margin debt and GDP.

–  Kai Stinchcombe published a compelling (and very controversial) article explaining why Bitcoin has no purpose, and likely never will. This certainly challenged my own thinking — I love that. You can read it, or listen to a great conversation from early this week between Kai and James Grant.

–  More parabolas. This one is the entire Consumer Discretionary sector.

–  There is a big difference between what is “permissible” or “suitable” for investors, versus what is really in your best interest. Be certain you’re working with a full-time fiduciary when you ask for advice.

I hope you have a great weekend!