The Great Inflation Debate, Take Two. In our February 17th Chartbook EVA, we entered into the always hotly contentious realm of attempting to determine the true level of inflation and, closely related to that, its trend. It goes without saying—but I will anyway—that there are few areas where the words “Believe those who are seeking the truth; doubt those who say they have found it” are more applicable. Read More

The sampler. This week’s edition of the Evergreen Virtual Advisor is a trilogy of recent short articles by three of my favorite thinkers at our partner firm Gavekal. The first is a timely essay by Tan Kai Xian (fortunately he is kind enough to let us refer to him as KX!). As you will soon read, he reflects on last week’s embarrassing flame-out of Obamacare reform and discusses the potential implications for tax reform. Read More

Introduction This week’s edition of the Evergreen Virtual Advisor (EVA) is a return to one of our most popular formats, the Evergreen Exchange. This structure gives three members of our investment team the chance to agree, disagree, or simply comment on a topic of interest. The theme of this issue revolves around common misconceptions in the market. Read More

Fed Storm Rising. It’s been roughly 13 years since I borrowed—and modified—that title from Tom Clancy for our old hardcopy client newsletter, The Strategist. It was written during the early stages of the last Fed tightening cycle, a hiking campaign which was to last for two years, jacking up its overnight rate from the previously-unimaginable level of 1% to a peak of 5 1/4% in June, 2006. Despite the fact the Fed increased rates at 17 consecutive meetings from 2004 to 2006, the S&P 500 rose pretty much steadily throughout this period. Stocks even made a slightly higher high in October of 2007, in the wake of the Fed’s somewhat panicky 50 basis points (1/2%) cut, in September of that year, due to the escalating crisis in the housing market. On the day this sharp rate reduction occurred, the Dow spiked 2.5% while the S&P 500 vaulted an even larger 3%. Investors were clearly remembering the old Wall Street maxim that you don’t fight the Fed. Read More

The Opinion Exchange. One of our primary goals with this newsletter is to provide our readers with a wide range of viewpoints. As noted previously, the risk with this is that we don’t convey a clear idea of our actual views. Yet, we’ve always felt that’s a chance worth taking, particularly since we try to subsequently clear up any ambiguities. Read More

Strange bedfellows: angry voters and market highs. It might seem odd, in the midst of the rampant bullishness engulfing markets since the election—and further stoked by Pres. Trump’s enthusiastically received congressional speech this week—to bring up the topic of social malaise. However, since Evergreen investment team members are congenital contrarians, we will do exactly that in this issue of the Gavekal EVA. Read More

Time for a surreality check. Somehow, I don’t think I’m alone in waking up on certain mornings wondering into what parallel universe I’ve been transported. The daily surreality show I’m referring to includes, but is not limited to, watching what are decidedly unpresidential press conferences by our new president—not to mention an endless stream (of consciousness) tweets—and shockingly public feuds with the US intelligence community. These recurring events have caused global uncertainty surveys to go postal. Read More

In the world of inflation, expectations are important. If you ask most people in the US what they believe inflation is expected to be, they are likely to say around 2-3%...why? Because that is what they have experienced over the past 5-10 years. Read More

It is odd how a single event can cause some notable leopards to change their spots. In this case, the election of Donald Trump has caused reverberations throughout the financial world, and some apparent self-reflection by several of the world’s leading thinkers. Read More

Upsetting the dollar cart? The year 1971 has been on my mind a lot this week. On a personal note, my wife and I have been staying at one of Arizona’s oldest and most charming resorts, the Wigwam, right outside Phoenix. It was established in 1927 by the Goodyear (as in tires) family on a “mere” 17,000 acres. Upon arrival in those days, guests were given a key—and a horse! Even on horseback, it must have taken weeks to see the entire spread. Read More