The Tao of Pooh – Market Notes
By Julien B. Booth
March 10, 2023
There is a velocity to the modern world that we are all learning.
Time takes time. So in order to understand the context of this velocity better, and its effects, I turn briefly to Eastern Philosophy:
In the past several days we have literally witnessed a “decade’s worth – in the prior order” of market events. While these events primarily concern the West Coast technology sector (read: cryptocurrency fallout), they are reflective of a decade of loose financial conditions and the behaviors that often follow.
After grinding in financial markets for 25 years, I have witnessed 3 full boom-bust cycles – each time the hubris of the “new way” of operating financial markets is hailed as financial gospel.
We always have 2 or 3 clients that point out our ignorance and stubbornness at being convicted on things such as balance sheet strength. I have come to cherish this client profile; we should always be willing to test our working hypotheses and adapt accordingly.
Sadly, this boom-bust cycle is ending just as the others have, in tears for most speculative investors. The arrogance of the silicon valley wizards this go-around was breathtaking. The smartest guys in the room have done it again.
The news networks should be ashamed of pumping these “legal frauds” – but it would be foolish for me to expect them to change their spots. Age brings acceptance.
We are a tiger than knows its stripes. I like income securities that pay exactly as intended. I like balance sheet strength (think Berkshire with $150+ Billion in cash). I like essential services (utilities). And I like Gold.
Thus far, these types of positions are performing well. Our position on Gold often creates some consternation, but in times of financial stress (today), Gold serves as a tangible financial instrument. Gold has duration testing.
We will never be perfect, but we are going to do everything to protect your hard-earned capital.
Thank you for your interest.
Julien B. Booth
Chief Investment Officer – Fixed Income & Real Assets
BRC Wealth Management