Investment Management

Disrupters, Adapters, Victims Generative AI has replaced interest rates as the top factor moving markets. It’s not a coincidence that OpenAI, Google, Meta, NVidia, Apple, Amazon and others originated in the US. US equity markets have been the dominant beneficiary of the AI wave to date, and that will likely continue. The wealth gap will widen as small elite tech…

NVDA Chips We don’t typically zoom in this far on a particular company, but I felt compelled to zoom in on Nvidia this week for a variety of reasons. Quick disclaimer: we may or may not hold shares in NVidia at any time. We may change our viewpoints at any given time. This is not advice. Nvidia has just 26,000…

Credit Growth Credit growth remains quite healthy despite the obvious challenges in the office markets, particularly in the US. For good reason, private credit gets most of the attention these days. While private credit markets have grown $500b in the past four years, public credit and bank lending have grown $2.3T and $2.2T respectively. Increasing access to credit helps support…

Fed + Inflation Interest and inflation are still the dominant market factors, and yesterday, the Fed decided to keep rates at 5.5%. Inflation has trended down, but the Fed has paid a hefty price to raise rates and does not want to cut too early. As of today, the futures market expects no cut in March but a 99% chance…

Goodhart’s Law Last week, one of the data providers for Truflation’s real-time inflation tracker made a small but significant adjustment to their historical data set. That adjustment pushed Truflation’s US inflation reading from just above 2% for 2024 to just below 2%. While I’m sure the adjustments are justified, I can’t help but feel a bit disappointed that the 2%…

Stats While the end of Q4 2023 was primarily focused on the victory in the fight against inflation, the expectations for rate cuts were too optimistic. The story for Q1 2024, at least for now, will be the market digesting the reality that there may be just two rate cuts in 2024. That’s down from the six rate cuts predicted…

AI + Robotics DeepMind had a great post last week about AI and robotics and their new models. I liked their comments about prioritizing layers of safety. While I’m not worried about AI generally, I don’t want untrained robotics swinging around and confusing me for anything other than a human. The ChatGPT store opened yesterday, and the most popular app…

2024 will bring more positive novel surprises. New years always do. In 2023, it was the dramatic acceleration in AI, which touches nearly every industry, and the early stages of an answer to the obesity epidemic with GLP-1s. Here is a list of what’s on our minds going into 2024:   The Misery Index is down significantly The Misery Index…

2023 Review Rates are notoriously tricky to predict. With that said, rates across the board are solidly trending down. The US inflation rate has also trended lower since its peak in May 2022. The most significant and slowest portion of the inflation rate (Consumer Price Index) is shelter (rent), which shows signs of a sustained drop. The Zillow Rent Index…