Quarterly Review
Q3 2023 Compass Review
Expectations are hard to change. We expect certain things from our partners, our friends, an Amazon delivery, and a dining experience. When these expectations aren’t met, it’s hard to accept reality. Here is the new reality; Lunch just got a whole lot more expensive. In previous letters we warned that the era of “free lunches”…
Q2 2023 Compass Review
The second quarter can be summed up in one word: Resilient. A resilient economy, despite higher interest rates. A resilient stock market, despite narrow leadership by the tech giants. A resilient banking system, despite last quarter’s banking failures. A resilient Ukraine. And a resilient America, despite a slate of controversial US supreme court cases. It’s…
Q1 2023 Compass Review
A major crisis. Accommodative monetary policy to save the system. Lower long-term interest rates. Financial and energy stocks priced for a major recession. Large cap tech stocks driving the market averages higher. Was this the summer of 2020 or the first quarter of 2023? After a rotation away from growth at any cost over the…
Q4 2022 Compass Review
The world got a whole lot poorer last year. There was almost nowhere to hide. The S&P finished down 20% and the Nasdaq lost 33%. Even long-term US Government bonds declined 29%. Cash bought you less food at the grocery store. This meant the classic 60/40 stock and bond portfolio had one of its worst…
Q3 2022 Compass Review
According to the University of Michigan Consumer Sentiment Index, consumers feel as bleak as they did during the great financial crisis 15 years ago. At the same time, it’s still nearly impossible to get a restaurant reservation on a Saturday night, find reasonably priced airfare, and I-95 is chock full of return to the office…
Q2 2022 Compass Review
Last quarter we said: “We were welcoming the correction as a necessary adjustment in speculative excess that in the long run would threaten market stability.” So, while we don’t necessarily welcome last quarter’s 16% plus market decline on top of the first quarter’s 4.6% hit, it is not unexpected, given the amount of excess that…
Q1 2022 Compass Review
The quarter started off predictably enough with December’s market weakness continuing to reflect fear of war, Fed tightening, deflation of the growth stock bubble and supply disruptions. Just when it looked like the bears were in control of the market, it turned with a vengeance and rallied back to regain nearly all its losses for…
The New Reality
Q3 2021 Compass Review Last quarter we reached an inflection point, and the markets are trying their best to adjust. Part of that adjustment is simply recognizing what the current reality is, and the other part is trying to anticipate what the new reality will look like next year and beyond. At this point, much…
Diagnosing the Economy: Q3 2021 Review
The economy and markets are often described in medical terms, as if we were diagnosing every economic cycle and had a prescription for every market illness. So it’s not surprising that the current applicable term for the state of the world is that we are in recovery after suffering a severe illness, both figuratively and…
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