SABLELIGHT Center’s Post

As usual, there are many conflicting signals out there, and there can be a compelling narrative built that is positive, and another negative. It always pays to be defensive and cautious in part, because after all, capital preservation usually tops the list of objectives for our clients and their wealth. And many are struck by recency bias, spoiled by ~15 years of an everything-bull market (fueled by low interest rates). The period from the Financial Crisis of 2008 to 2021 could be one of the best return cycles in history for most assets. We likely don’t see a bull market like that again in our lifetime. Occam's razor is a principle attributed to 14th–century friar William of Ockham that says that if you have two competing ideas to explain the same phenomenon, you should prefer the simpler one. That holds true for most things in life, including the world of investing and wealth planning. I try to distill down the info out there and cut thru the noise. The big overhang is the amount of US government debt - it is likely the next crisis laying in the weeds. I’ve been crafting up a piece on this issue for many months, but haven’t included it until now. But timing it is difficult to say the least. Trump and his team won't be helpful on this front, so this crisis may be coming to a theater near you in the future.... https://lnkd.in/gbvcXghP

In honor of Juneteenth, we're highlighting data from our NFCS Investor Study and insights from focus groups with young investors of color. We found that investors of color tend to be younger than white investors and are entering the market at a faster pace. Many of their behaviors and attitudes reflect those of young investors more generally, such as relying on social media for investing information and trading risky investments like cryptocurrencies and meme-stocks. Read the report ▶️ https://bit.ly/3vwh9Kc

🚨 The Pi Paradox: Why Finance Loves Numbers That Never End 🚨 Let’s talk about Pi—that infamous, never-ending, irrational number that’s made more appearances in finance than a stock market analyst saying, “This time, it’s different.” Spoiler: It never is. 🌐 Pi in Finance: Pi is everywhere. No, really. You’ll find it in option pricing, risk models, and even the formulas quants swear by at 3 AM when they’re downing espresso shots and praying the market doesn’t open in the red. We’re using a number that literally never resolves to make decisions that affect trillions of dollars. How fitting. 📈 Real-Life Application? When you think about it, trusting a number that just… keeps going is kind of the perfect metaphor for the financial industry. Take volatility, for instance—just like Pi, it never ends, and we keep trying to predict it. Or inflation—round and round it goes, where it stops, nobody knows! But sure, let’s use Pi to price your portfolio. What could go wrong? 😉 🎯 Interpretation: If finance were a party, Pi would be the guest who never leaves—always there, looming, never fully understood, but hey, they seem smart, so we keep them around. Irrational? Absolutely. Just like trying to time the market or expecting your bitcoin to “moon” next week. 💭 Thoughts to Chew On: In a world where nothing is certain and everything is volatile, maybe the obsession with Pi is perfectly appropriate. What’s more fitting for finance than a number that never settles down? Because, let’s face it, if you’re looking for closure in markets, you’re in the wrong game. So, next time someone tells you that their formula based on Pi is the key to beating the market, just smile, nod, and remember: they’re trying to solve infinity… with spreadsheets. #FinanceMath #PiInFinance #MarketVolatility #QuantProblems #IrrationalMarkets #InfinityAndBeyond

📰 The Australian Financial Review: Why Howard Marks says you’re making a big mistake Howard Marks of Oaktree Capital Management, L.P. says investors must ignore manic depressive markets and focus on the bigger picture. Rates will be higher for longer and that will bring pain – and opportunity. 📈 🌟 Howard is famous in global markets for his public memos to Oaktree clients, which are a unique mix of insight, history and commonsense. We can't wait to hear his latest insights at this year's #SohnHeartsandMinds 🎤 Full article here: https://hubs.la/Q02Pr8yb0 #SohnHeartsandMinds #GlobalInvestmentLeader #ImpactInvesting #BrightestMindsOnTour Department of State Development

Our weekly look back at the markets, global events, and a song to start your weekend. Written by Russell Lazaruk, Managing Director & Portfolio Manager. #Investing #FamilyOffice #Investmentmanagement #wealthmanagement #weeklynewsletter

Our weekly look back at the markets and global events is out for your reading pleasure. This week an obligatory look at what a Trump Presidency could mean for the markets, labour disruptions here and in the US, Canadian culinary inventions, and the latest rate cuts. #familyoffice #financialplanning #investing #esg

Although I am averse to making financial market forecasts, I can say with some level of confidence that over any long-run horizon most investors will have to encounter painful periods of losses in equity markets. Some seem unaware of this (or at least behave as if they are) while others spend most of their time attempting to predict when such phases will occur. Neither of these will lead to good outcomes. If I am confident that severe declines will happen, do I have anything to say on when they will arrive? No. I have little idea. The next one might begin tomorrow, or in ten years’ time. They have transpired in the past and will happen at some unpredictable point in the future. The difficulty of experiencing and living through tumultuous times mean that many, many investors dedicate themselves to reading the runes of financial markets. Seeking that ever elusive goal of capturing the higher returns available, while avoiding the downside risk that comes as part of the bargain. This is a fool’s errand. The cost of consistently attempting to predict the next equity market drawdown – and often being wrong – will be pernicious and permanent. The compound impact of these poor decisions will likely do far more lasting damage than the next bear market we experience. If we are not busy predicting the gyrations of equity markets, the other major risk is that we are not expecting such drawdowns to occur at all. While we should always be surprised at the cause and timing of a bear market (because they are difficult to predict), we should not be shocked when they arrive. All investors must have their eyes wide open – these periods are a feature of equity investing, and they will feel awful. So, if we cannot predict torrid market conditions but equally should not be surprised by them, what should we do? We cannot simply say – equities could fall by 40% – that is an anodyne statement which is easily dismissed. Instead, we need to create some vivid expectations about what the landscape might be like. We won’t know precisely what will happen but there are patterns of behaviour that are likely be a feature: – Economic news will be terrible. – Everyone will become an expert on ‘the thing’ that has caused it. – There will be constant images of red screens and traders with their hands on their heads. – Investing for the long-run will be professed as an outdated concept of a bygone era. – Some forecasters will be claiming that this was inevitable having been predicting such an occurrence for 11 years. – It will be difficult to envisage things getting better. Investors in equities win over the long-term by being optimistic, but that alone is not enough. We also need to be sufficiently realistic to understand that the long-term will include some torrid periods that will present the most exacting behavioural tests. If we don’t plan for those short-term challenges, we are unlikely to reach our long-run goals. Link to full post in the comments.

Another great post and blog from our Investment Research Director Joe Wiggins. A good reminder of long term investing and the fact we will experience painful periods along the way. It's how we react (or don't!) that matters. https://lnkd.in/ec7-KrBk

Great insight as always from Joe Wiggins: “Investors in equities win over the long-term by being optimistic, but that alone is not enough. We also need to be sufficiently realistic to understand that the long-term will include some torrid periods that will present the most exacting behavioural tests. If we don’t plan for those short-term challenges, we are unlikely to reach our long-run goals.”

UNVEILING THE SECRETS OF WALL STREET’S PAST: A CONVERSATION WITH DAVID B. SICILIA Mike interviews David B. Sicilia. Few stories captivate the imagination in the riveting world of finance, like the sudden rise and fall of markets. From the peaks of success to the depths of despair, understanding the intricacies of Wall Street’s history offers valuable insights for investors and enthusiasts alike. Recently, We had the privilege of delving into one such story with David B. Sicilia, a renowned economic historian, as we discussed his book “The Day the Markets Roared: How a 1982 Forecast Sparked a Global Bull Market.” SUMMARY The conversation with David was nothing short of enlightening. We delved into the heart of Wall Street’s past, exploring the events of that fateful day in 1982 when Henry Kaufman’s forecast sent shockwaves through the financial world. David painted a vivid picture of the excitement and optimism that swept through Wall Street as investors hung onto Kaufman’s every word. What struck me most was David’s deep understanding of the dynamics at play. His insights into Kaufman’s voice’s power and its ripple effect on market sentiment were genuinely eye-opening. We discussed how Kaufman’s forecasts weren’t just predictions; they were signals that shaped the course of financial markets. David shared anecdotes and behind-the-scenes stories that offered a glimpse into the inner workings of Wall Street during its heyday. From the frenzy of media attention to the intricacies of market trends, David’s firsthand accounts shed light on a pivotal moment in economic history. @milliondollarbookman @thedreamstarter https://lnkd.in/dG7ZCDim