Asia Opportunity Commentary 2Q2020
August 2020 Reading Length: 9 pages
The Essential Incentive and Disincentive System of an Effective Operative Cryptocurrency
August 2020 Reading Length: 4 pages
2nd Quarter 2020 Commentary
July 2020 Reading Length: 29 pages | Listening Time: 1 hour 20 minutes

The goal of our quarterly reviews is to address topics that we think are most important for our clients to understand. This time, an about-face: these are responses to questions that our clients have been posing in recent roundtable events. The thing is, the questions were consistently of a kind. Almost all were about inflation and oil prices: Why will they rise? And how does that even work? Inflation is the greatest threat that investors can face, but is not widely acknowledged, or is largely dismissed. By the time it is recognized, it will be too late. And more importantly for us, the workings of inflation are not well understood, but really should be, and it might be that the immediacy and frankness of a Q & A session will be more illuminating and accessible. That’s “what’s inside,” along with supplementary information and how to incorporate the sorts of business models that can be sound in any environment, but are particularly poised to flourish in the years to come.

Cryptocurrency and Credit Cards: Pathway to a Disruptive Threat
July 2020 Reading Length: 5 pages
Bitcoin Supply Curve Over Time
June 2020 Reading Length: 6 pages
Asset Light, Real Assets - Economically Resilient Business Models
May 2020 Listening Length: 1 hr 2 min

It’s no secret that we have viewed money debasement and inflation as the most serious risk facing investors. Government responses to the COVID-19 pandemic, though necessary, are only exacerbating this risk. This view has yet to become part of the public conversation, much less be adopted by more than a very small contingent of investment firms. Our early arrival at this conclusion has allowed us to position the portfolios in a number of business sectors that tend to be direct beneficiaries of certain inflation vectors. The purpose of this presentation is to describe additional business models that can also be either direct inflation beneficiaries or, if not, that can thrive in such an environment in the months and years to come. These will be introduced by a few of our analysts: James Davolos, Utako Kojima, and Ryan Casey

1st Quarter 2020 Commentary
April 2020 Reading Length: 25 pages | Listening Time: 1 hour 30 minutes

It is not an overstatement to say that we are in the midst of a paradigm shift in the financial markets. We believe that what’s coming down the road is going to be a reversal of the conditions that existed for the prior three decades; all the accepted wisdom and the statistics and correlations will be out the window. Understanding that is probably the single most important preparation any investor can undertake right now. We have seen significant risks in the market for some time now, and have been preparing accordingly; the current pandemic has accelerated and magnified the risks, not changed them. As in everything, context is key. This review covers how we got here, what has changed and, in preparation for a money-debasement world, what kinds of business models and assets one doesn’t want to own as well as what kinds one should consider.

Cryptocurrency Mainstream Legitimacy: A Brief Survey of Institutional Acceptance
April 2020 Reading Length: 5 pages
Steve Bregman on Debt Debasement
April 2020 Listening Time: 30 min

A review of the economic and investment implications of the CARES Act stimulus package. The U.S. and global economies have entered a historically new phase that is, for practical purposes, permanent. The debt and money creation are of an unprecedented scale, and will mark the beginning of an indefinite period of inflation and money debasement...

Letter from our Founders
March 2020 Reading Length: 2 pages

Amid the tumult that is about us now in the financial markets, we offer a few comments. We will be providing more information on our website today and in the coming days, both audio and written, where we can communicate more substantively. Paradigm shifts are typically unnerving as the market – which is ultimately driven by people, with human emotion – digests the new reality.

Q&A with Murray Stahl
March 2020 Listening Time: 1hr 9min

Recorded during the historic market decline, March 24, 2020.

Market Update
March 2020 Reading Length: 6 pages
4th Quarter 2019 Commentary
January 2020 Reading Length: 24 pages | Listening Time: 59 minutes

What a great disconnect can exist between what we think we know, what we think others know, and what they actually believe and know. It no doubt works in the reverse, too. We felt that perhaps this presentation was repeating once too often the same observations – albeit with exciting new details!! – about the valuation divide between index-centric securities and all the rest, and about the severe concentration risk of ‘the market’.

3rd Quarter 2019 Commentary
October 2019 Reading Length: 22 pages | Listening Time: 62 minutes

Today, the asset classes and economic sectors to which most investors are allocated are dependent upon a continuation of the current status quo of the U.S. financial system: moderate 2% GDP growth and moderate 2% inflation as well as record-low 2% interest rates. This ‘normal’ is the basis upon which mainstream – which means index-centric – equities and bonds have been priced, and upon which investors expect to earn a certain level of return. But this condition is transient.

2nd Quarter 2019 Commentary
July 2019 Reading Length: 16 (28 with Appendix) pages | Listening Time: 54 minutes

The most damaging stock market event of this generation may have been the unprecedented 3-year collapse of the Internet Bubble. Technology stocks dominated the market with the highest valuations ever before witnessed – though, in the moment, these seemed entirely reasonable to most investors. A measure of the damage: the S&P 500 returned 14.7% a year in the last 10 years; but over the last 20, since December 1999, only 5.9% – that’s been the 2-decade return for someone invested at that time. But what if the Internet Bubble never really ended? The number of people on the internet today is 18x greater than it was then. On the back of that extraordinary rise, the technology sector is again the highest weight in the S&P 500. But that doesn’t include mis-labelled companies whose premium (some would say unsupportable) growth rates and valuations depend on continued expansion of internet usage: Amazon.com is classified as a Consumer Discretionary company; Facebook and Google are in Communications; the country’s largest cell-tower and cloud server data centers are listed in Real Estate. Add it all up, and one-third of the value of the S&P 500 is now in internet beneficiary companies. Seems normal enough, again, yes? Except for one thing. Internet usage growth is about to face limits that cannot be avoided. The early edges of those limits are already appearing. As that unfolds, the normalization of profit margins and valuation multiples of these market leaders, from Apple to Microsoft, even to a level well above that of the average company, will, for those who did not get to witness the first Internet Bubble collapse, provide a front row seat.

1st Quarter 2019 Commentary
April 2019 Reading Length: 17 pages (23 with Appendixes) / Listening Time: 64 min

Indexation’s great argument is diversification of security-specific risk and the performance benefit of low (or even no) fees. The performance debate has now been answered; you need wait no longer. With ETFs’ 20th anniversary upon us, which also encompasses a full market cycle, equity ETFs as a class — growth and value, domestic and international, developed market and emerging, biotech index funds to IT to financials — have under-performed bonds. Over these two decades, they haven’t even come close to the universally presumed 10% return. From here forward, they might not do even as well as that. The risk debate continues. But it has now moved to a higher-stakes plane. Acceded: indexation is an excellent means to diversify into and across the important asset classes much or most of the time. Counter: by definition, indexation also exposes one’s capital into and across all the systemic risks that have destroyed investors’ savings during economic and political crisis and upheavals. Those feel like rare events only to those who don’t review the history — even modern history. It happens again and again, and today’s valuations and systemic risks are measured in extremes. There is a time and place for indexation. Now is a time to learn about upheaval investing: concentration as a method to diversify against systemic risk.

Government Suppression and Consensus Money: What the Government Really Thinks
February 2018 Reading Length: 4 Pages
Cryptocurrency or Fiat Currency? Volatility or Debasement? Choose Your Risk.
October 2017 Reading Length: 3 pages
The Rise of the Artificial Asset Class
June 2016 Reading Length: 4 pages
Cryptocurrencies: An Emerging Asset Class
December 2015 Reading Length: 4 pages