Bond Dogs Barking
By Julien B. Booth
December 20, 2022
Merry Christmas & Happy Chanukah!
“What we wish to be true clouds our perception of what is true. Suffering is the moment when we can no longer deny reality. The moment of suffering – when you are in pain – is a moment of Truth. It is a moment where you are forced to embrace reality the way it actually is. Then you can make meaningful changes and progress. You can only make progress when you are starting with the Truth.”
Naval Ravikant – Almanack of Naval Ravikant
I have never been a particularly popular fellow, not in elementary school, Jr. or Sr. High, college, or in my Concord, NC, social circles. I was not popular in athletics (a crappy baseball player, a decent lacrosse goalie – a painful position), studied Forest Management (4 females in our class) at NC State, and now I love bonds. Cumulatively, I am deeply unpopular, perhaps anti-popular.
Bond gals/guys are never popular, but Bond guys/gals do like the numbers, aka financial reality.
Thank God I duped a beautiful and wicked smart woman (Kelly Booth) to take pity upon me. I tied her up before she could figure me out. She was the best trade of my entire life.
For some time, I tilted at windmills by pointing out the BS that has infected the financial markets. Pointing out Truth is definitely not a way to be popular, or good for business. I hate owning my faults, too!
Reality is now roaring. I turned 50 on Sunday – my receding hair, burned skin, and mobility are certainly signaling reality.
In the markets, Reality IS NOT pretend money, whether printed (Federal Reserve), crypto-digital tokens, or make-believe growth companies (ARKK, QQQ, etc.) that grow to the sky.
Reality IS companies that can pay their bills, regardless of good times, recession, or otherwise.
Since 2008, interest rates have been suppressed, largely as political tools to inflate asset prices (and it feels so good). Perpetual PED use (performance-enhancing drug) is sure to have some downside.
Net, net, we are now in our element. Research matters, Character matters, and Real numbers (Cash) matter.
We have been laboring for this moment. We make investments in companies that are durable and anti-fragile. We look forward to the BS being cured. We love buying assets when everyone is losing their collective minds. Being popular in markets largely means overpaying. Few want the bonds now which can generate 9%+. The mimetic effect is alive and well.
Thank you for your interest in our process.
At 50, my greatest professional asset is the opportunity to work for people of Character. I am grateful.
Julien B. Booth
Chief Investment Officer – Fixed Income & Real Assets
BRC Wealth Management