Author: Neil Rose, CFA

This week the Federal Reserve cut its short-term interest rate policy by half a percent to 4.75%-5.00%, marking an end to a two-year effort to recoup some of the excesses in Covid stimulus.

Neil Rose explains why he's taking some profits and getting more defensive as investors continue to pump up stock valuations, especially Big Tech. Neil worries the markets are now depending on one big assumption, and the costs of being wrong are high.

Despite several requests, I have been remiss in posting the note I had to submit with my induction into Harvard’s Varsity Club Hall of Fame back in November. They ask awardees to write some reflections on their college experience.

Capital markets in 2023 showed investors’ resilience—or was it complacency? Clearer was yet another lesson on the dangers in following forecasts, especially those of policymakers, PhDs, and Wall Street strategists. The Fed’s interest rate hikes and tough inflation talk didn’t cause an “inevitable” 2023 recession after all.

Historically, mortgages have cost around 1.75% more than the benchmark 10-year Treasury note. Today, that spread is around 3.00%. That’s huge and likely not going to last. Something’s going to give—or break.

Are TIPS the best value in fixed income right now? Neil Rose explains why he recently added to holdings of inflation protected Treasurys.

Neil Rose explains why anyone can manage cash like Warren Buffett. He explains how Treasury bills work and why they are a no-brainer for one’s cash reserves.

Neil Rose and Arthur Mallet discuss: the hardest thing about investing, sources of investing advantages and the importance of position sizing for risk management and performance.

Neil and Co. catch up and talk about a market resembling both the late 1990s tech boom and the Nifty Fifty craze of over 50 years ago. Also discussed is Neil’s current research adventures into commodities and thoughts on electric vehicles and where he’s seeing value today.

Today’s inquiries are about Hawaiian Electric’s future as HECO makes national news for its possible culpability in the Lahaina fires and its deteriorating stock and bond prices. Will Hawaiian Electric declare bankruptcy?

Growth and quality are good things but risky when they become gateways to complacent and manic behavior.

It can’t be overstated how powerful ultra-low interest rates have been for asset prices and wealth accumulation over the past four decades—and the bubbles. But perhaps it is now time to think how unsustainable constant intervention and stimulus are, despite government’s good intentions.