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Third Quarter 2017 - "You Can Teach a Macro Thinker New Tricks"

Predicting the impact of macro factors is one of investing鈥檚 greatest temptations. Turn on the news and topics like commodity prices, interest rates, and currencies are being discussed constantly, with pundit after pundit confidently offering commentary on how these factors are going to impact equity markets. And in the short term, sometimes they get it right. When Hurricane Harvey hit Texas and it became clear that major production and refinery operations were going to be disrupted, many observers correctly remarked that oil prices would rise in the midst of the supply tightening, and companies that benefit from rising oil prices would reap the reward in the form of higher equity prices. While these types of equities would've been short-term winners, it鈥檚 important to note that this is a trade, not an investment, and trading strategies rarely compound capital over long periods of time.

Client Letter 2017Q3 Duplex.pdf427.68 KB