Bulls on Parade

After all the chaos of the last few weeks, this last week seemed like a vacation. The banking crisis slowed with First Citizens agreeing to buy SVB's $90B in assets & loans for $72B. In other banking news, UBS picked Sergio Ermotti to run the new combination of Swiss banks. Some other big topics of the week were Alibaba will be splitting into six different companies, Finland and Sweden will be joining NATO, and just today OPEC+ surprised with a million barrel production cut. These cuts came ahead of the meeting scheduled for later this week, in which a cut was expected anyway.

I think the real story was the NASDAQ finding its way into bull market territory overcoming so many obstacles. The NASDAQ composite is now up 20% since its lows late last year. The Nasdaq 100 is up even more at 26% off its lows.62% of names in the index are 20% or more above their 52 week lows.

Last week was a strong week for most equities, commodities, and risk assets in general. Crude was up big and looks to be on track for another big week with today's announcement.

I thought it would be good to take a look at major assets for the quarter. NatGas was off so much and Bitcoin up so much that I had to use the chart break feature in Datastream. Same as last week, it was a strong quarter for equities. Commodities were mixed, but I realized I have to expand this a little more next time. Most currencies had a good quarter versus the US Dollar. Bond indices were pretty solid across the board.

Let's have one more look at the quarter via equity sectors in the FTSE World index. Tech out for revenge for 2022's down year and Energy the biggest loser so far. Sorry, please ignore my misspelling of Consumer Discretionary here.

Best of the Week

I've shared Dr. Pippa's comments before, but her points are so important that I'm going to keep them front of mind when possible. She notes that there are many things going on that the public just doesn't see. This is mainly because the news doesn't cover unless there's a human interest story. China used Russia's aggression as an intelligence gathering and probably even recommended the strike to get this data. Then they come in as the savior or peace keeper to look favorable in the world's eyes. She notes that the Chinese balloon is not the first time an Asian power used balloons. The balloon also just happened to make their way over the places in the US were two of our three nuclear ballistic missile stations are. She thinks that China, using Russia, is just trying to keep us on high alert costing us a lot of money. This was similar to how President Reagan broke Russia in the late 1980's. They even touch on TikTok's roll in this new cold war. This is a SUPER important conversation to be aware of. Listening time: 78 minutes (Dr. Pippa is from 7:30 to 60min mark)

Best of the Rest

I went back and forth on which of these first two would be my favorite this week. I chose MacroVoices because of its global importance to our lives. On to this one, David Einhorn is a well known hedge fund manager. Partly because of his performance and partly because of his public comments. David touches on a lot here. He doesn't think many buy anymore based on what a company is actually worth. Momentum, which has been popular, is not a focus for him. In fact, he probably fades it. My favorite topic is the jelly donut theory. Essentially, David compares rate cuts and QE to jelly donuts. The first donut is great, but the twelfth, not so much. He thinks it's a mistake to put the responsibility of inflation on only the Fed. He said fiscal policy is just as important. Another comment that caught my ear was that he thinks the momentum of index investing is over. There are not many more active investors to be fired. Index is so big though, it's moved from price takers to price makers. There's a ton here, but a couple more points are that you need to ask the right questions, quality is high returns on capital on a sustained basis, and he's ok with concentration if the situation is right. Patrick always does an amazing job asking the right questions. Listening time: 71 minutes

Interesting post here to get more inside the business of banks. Marc walks us through a few points in this free version of his blog. First creditors are customers and customers are creditors. Second, "banks operate a two-sided platform and maintaining an equilibrium is important." Third point is that growth really isn't that good for banks, well fast growth. Fourth, confidence is king, and we saw that recently with SVB. The fifth and final point is that no one on the outside really knows what's going on inside a bank.

Bob is challenging the safe and boring index mindset. Indexing is easy, but nothing great comes to those that take the easy way. That's essentially his message. There are a ton of links to motivational movie scenes and songs here. The way I read this was, essentially, get out there and do something to make a difference.

This one was personal for me. As an athlete, I had quite a few prime opportunities to further my accomplishments and did not always do so well. I did not handle pressure well back then. In fact, I have one story where I literally choked during an event, went from winning with a chance at a school record to barely finishing. This was an amazing conversation and something I recommend for those that have issues with pressure situations. Listening time: 39 minutes

One for the Road

Very US centric episode here, but car buying is one of those annoyances of personal finance. In this episode, the guys talk about car brokers, which I didn't know existed, if warranties are good or bad, how leases are now a third of deals and were one in nine, deals are better for American makes than they are for foreign, and that credit unions are a better spot for financing. Listening time: 31 minutes

Thanks for reading. Have a wonderful week. There will be no post next week with the Easter holiday and will have to see about the week after as I'm off for the week.

Michael