Beyond The Headlines

Here we will post regular letters covering our current macro and micro views.

Sicart Associates Macro Views Presentation September 2017
October 2, 2017 | Bogumil Baranowski

Watching the high risk stock market, fragile growth, with limited pro-growth tools left available, we share some secrets to keeping a fortune in those perilous times.

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The most unusual bull market
September 26, 2017 | Bogumil Baranowski

Our current, highly durable bull market is characterized by three qualities: it might be the least exciting bull market in history, it’s been possibly one of the hardest to beat, and when it ends, the resultant crash will have been anticipated for months if not years.

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It’s easier to find someone to blame after the losses than to prepare for adversity
September 13, 2017 | François Sicart

“Shirtsleeves to shirtsleeves in three generations.” – The universality of the proverb above is the reason why, as investment advisers and family office to several generations, we view it as one of our primary missions to help our client families avoid the “curse of inherited wealth”. A good place to start is to try and avoid speculative bubbles and their fortune-destroying aftermaths.

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Life in a shrinking economy, a forgotten concept
August 21, 2017 | Bogumil Baranowski

With everything build for growth, with all assumptions hoping for a never-ending expansion, we take a contrarian view and consider a world with a shrinking economy. We see tailwinds of the last 40 years turning into headwinds ahead, and changing how we think about investing, and wealth preservation.

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How can we be wrong?
July 31, 2017 | Bogumil Baranowski

When we analyze an individual stock or the market as whole, we wonder how our conclusions can be wrong. Lately, we think the current market offers extremely low reward at an extremely high risk. How can it keep going up forever? Only if it finds buyers. Since the last financial crisis, debt-funded corporate share repurchases have amounted to almost 20% of market capitalization, and they offset net selling across most other investor types. Will anyone replace those buyers? And do they have the capital to do so?

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DANGER FOR THE 20%
June 29, 2017 | François Sicart

The asset bull market of the last eight years has been quite comfortable for the 20% of the population who own investment portfolios. This is no time for complacency, however.

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The Emperor’s New Clothes – Understanding Today’s Financial World
June 23, 2017 | Bogumil Baranowski

Sometimes it seems that we learn all we need to know in life as children, and then somehow forget it all as adults. Recently, I had the pleasure of reading again Hans Christian Andersen’s tale – “The Emperor’s New Clothes”. Tricked by two enterprising weavers a vain emperor agrees to wear a suit made of invisible fabric. As you may remember, when the emperor chooses to parade his new attire, only a child in the crowd dares to say he is not wearing anything at all. Let us, for a moment, look at the financial world through the eyes of that child.

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How to save a fortune, and make money in these perilous times?
May 24, 2017 | Bogumil Baranowski

Our clients are families, and our job is to take good care of their fortunes for generations to come. We are playing the very long term game. We can wait. Today investing may feel like shopping in a crowded department store at the peak of pre-holiday frenzy, but we all know what happens after New Year’s Day — fewer shoppers, better selection, better prices. It only takes some patience.

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PREPARING FOR THE SALE OF THE CENTURY — OR JUST BEING PRUDENT?
April 12, 2017 | Bogumil Baranowski

As much we avoid forecasting the market’s direction, we have reasons to believe the US stock market is too high. It’s not a question of “if” but “when,” “how much,” and “for how long” stock prices will drop. We believe that most asset prices could be subject to some of the biggest declines we have seen in decades, if not a century.

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February 2017 Monthly Letter
March 1, 2017 | Bogumil Baranowski

Please enjoy our monthly letter. We discuss the higher highs for the market, the earnings seasons, Fed rates decision, car loan delinquencies, and we share thoughts on the government policies.

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OBSOLETE ECONOMIC STATISTICS, CONFUSED POLICY MAKERS: HOW SHOULD INVESTORS NAVIGATE THE MINEFIELD?
February 21, 2017 | François Sicart

In a previous paper, I argued that policy makers are being increasingly misled by statistics that were created to measure the 20th-century industrial economy. Our more virtual, 21st-century economy is hard to capture with such obsolete methods. I concluded with a question, which I promised to answer in a forthcoming paper:
“Faced with contradictory indicators that seem to be confusing policy makers, what should investors do?”

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January 2017 Monthly Letter
January 30, 2017 | Bogumil Baranowski

Please enjoy our monthly letter. We discuss the impact of Trump’s policies, strong labor market, flat markets but still at record highs.

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WOULD THE REAL ECONOMY PLEASE STAND UP?
January 27, 2017 | François Sicart

“Consumer sentiment in U.S. hovers near highest in 12 years.” This cheerful headline from Bloomberg on January 13 reflects the general tone of the media during the recent “Trump Rally.” At the same time, the Gallup organization reports that “In the US, personal satisfaction [is] back to pre-recession levels.” But, as John Authers had pointed out in the Financial Times a few days earlier: Those strong consumer confidence numbers came as the new year dawned with some horrific announcements from the biggest department stores, traditionally the beneficiaries of consumer confidence and also big employers.

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December 2016 Monthly Letter
December 20, 2016 | François Sicart

Please enjoy our monthly letter. We discuss the impact of US presidential elections, interest rates heading up, stronger dollar, and record highs for US equity markets among other.

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With Nothing New To Buy Baby Boomers Are Ready To Cash Out
December 13, 2016 | Bogumil Baranowski

Insatiable appetite for stocks (over-sized demand) driven by baby boomers funding their retirement accounts has boosted the stock market for decades. Now a dry spell in new IPOs (shrinking supply) has helped propel stocks even higher to historic levels. Both of those trends are about to reverse. Baby boomers have already started upping their retirement account withdrawals (falling demand), and pent-up supply of innovation may inundate the market with a fresh wave of IPOs in the years to come.

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Between Inflation and Deflation
November 15, 2016 | François Sicart

The 1970s and early 1980s were years of turmoil. From 1963 to 1969, US President Lyndon Johnson had pursued “Guns and Butter” policies that simultaneously financed an escalating war in Vietnam and his “Great Society” welfare programs at home.

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Baby Boom Investors: Geniuses or Just Lucky?
September 2, 2016 | François Sicart

I founded Tocqueville Asset Management in 1985, with what turned out to be incredibly good timing. Since then, the S&P 500 index of the US stock market has risen from 210 to almost 2,200 — a more than ten-fold appreciation in just over 30 years.

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