Posted: April 22, 2022 | by: Thomas F. McKeon, CFA
In this issue we discuss the unpleasant quarter, consider inflation and climate change, the "Manager of the Moment", the battles at the PA State Teachers Pension, Professor Bear's Crypto Thought Experiment and Why We Love Multi-Family Investing.
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1Q-2022 presented a relatively rare occurrence: both the stock and bond markets declined. The stock market has had a very robust rally since the Covid-induced market panic of 1Q-2020. It is not unexpected or alarming that stocks retreat a little bit, especially against the backdrop of inflation and rising interest rates.
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Performance Graphic from Morningstar
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Is still running hot and is real enough for now. The Federal Reserve raised interest rates one-quarter point during 1Q-2022 and indicated perhaps more in the effort to constrain inflation. This was the main drag on both stock and bond prices this quarter.
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The financial media is famous for anointing some “hot” manager and breathlessly parroting every utterance they make. This goes back to Peter Lynch from Fidelity, Michael Price from Mutual Shares, Bill Miller from Legg Mason, Bill Nygren from Oakmark and others.
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We have been very vocal about our belief that so-called cryptocurrencies are neither currencies nor an asset class and are a disaster in the making when the reckoning finally arrives. We recently came across a blog post written by a professor of finance that points out just how empty the argument for crypto’s is and how the only thing holding up and driving prices is hype.
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In my introductory Personal Finance class, several students mentioned how they could make a great deal of money by investing in cryptocurrencies. Hearing this, I asked my students, “What is Bitcoin?”
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This article details how PA State Senator Katie Muth—a PAPSERS Trustee—has sued the board to release information critical to her role as trustee and fiduciary, which the board has tried to keep from her.
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Our real estate partnership invests heavily in private multi-family real estate rehab and development deals all over the country. One of our deal sponsors—Penn Capital—recently posted an article to their website outlining their rationale for this real estate focus. We re-print it below with their permission. Written by Penn Capital Principal Ed Rogan.
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Roger Waters and Company Performing “Mother” from remote locations early in the Covid lockdown in May 2020. Waters’ father killed in WWII, grandfather killed in WWI. When he asks “Mother will they put me in the firing line” he knows explicitly how that might turn out.
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We live in the age of disinformation. Politics, health, finance, climate you name it. Never have we observed more jibberish being promoted to serve some business or political agenda.
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