The Important Work of Developing Wise Investors

McAlvany Recap • Jul 10 2023
The Important Work of Developing Wise Investors
MPM Posted on July 10, 2023

There’s a saying that’s popular—particularly in the military, where brevity and clarity can save lives and win battles: “When I ask you the time, don’t build me a watch.” It’s a good saying for those who tend to answer the question “When will you be here?” with “Well, when I got up this morning…” Sometimes we need only the precise element of information we ask for.

As useful as that saying is, it’s not always appropriate. Sometimes we don’t know the time (metaphorically speaking). We can’t see the sky or shadows, and we don’t have a watch. At such times, it helps to know someone who can put gears and levers and oscillators and hands and bezels together in a way that yields an accurate timepiece.

The McAlvany analysts strive daily to be such craftsmen, searching for ever more accurate components for their devices—devices that tell not the time, but what the markets are doing and what they will likely do tomorrow.

And if it takes tens or scores of precision components to build a timepiece, it takes many more to build a “marketpiece.” And in the end, that marketpiece is not a device, it’s a well-trained and well-informed mind, constantly assessing data and testing and improving assumptions, information, and theories.

But the McAlvany analysts are not just aggregators, assessors, and assemblers of information, they are also teachers. They strive to help you refine your own “device”—your own mind, as it applies to markets, investing, and money management.

The entire company is structured this way, from the brokers who will patiently review your portfolio with you and recommend improvements, to the money managers who have lengthy and highly informative quarterly update calls and make themselves accessible to clients who have questions or want to discuss options, to the analysts who provide weekly information products summarized below—at great cost to the analysts, but free to you.

If you’re serious about handling money better and creating a legacy for your great, great grandchildren, these are priceless opportunities. Don’t let them go unused. Listen to them. Read them. Think about them. Tell your children and grandchildren about them. Use them to start putting together a coherent and extensive framework for understanding current events; world, national, and local markets; and how to participate in such markets profitably and safely.

This is the goal of the McAlvany Financial Group. It’s a demonstrably and heavily client-focused organization. It brings extensive resources to bear on the problems its clients face in order to improve their lives and the lives of their progeny, their progeny’s progeny, and so on. That’s a benefit stream you might want to walk right into the middle of. You can take the first step by clicking on any of the publication links below.

Key Takeaways:

  • When you change behavior, you change everything
  • If we haven’t beat inflation yet, what will it take?
  • Is this calm the eye of the hurricane?
  • How is gold enjoying the summer?

The McAlvany Weekly Commentary: David interviews Bill King this week. Bill is the author of the King Report, which is widely read at MFG and other money management companies, and is a 30-year veteran of the markets on Wall Street. You can see his broader bio here. One might be tempted to think that Bill is prone to build watches when asked the time, but the impression would be badly mistaken. The question that’s really being asked him is, “can you help us understand this complex development that virtually no one comprehends?” He can—and he does. His knowledge is voluminous and right on point. He discusses at pertinent and utterly fascinating length the bond market, the effects of interest rates on the equities markets, the effects of behavioral changes caused by the pandemic response on the labor situation, the deep and serious problems in China, and much more. His analysis goes back half a century and explains developments that for most people are just mysteries.

Credit Bubble Bulletin: Doug begins his weekly report with comments by one of the doyens of economic analysis, Ed Hyman, which “encapsulate the consensus bullish view for financial assets.” He then counters with developments from Thursday that demonstrate immense strength in the economy. “There was market recognition Thursday that perhaps all bets are off. If 500 bps of Fed rate hikes (and $600bn of QT) haven’t meaningfully tightened financial conditions, slowed demand or reined in inflation, what might it take to get the job done?” He follows this contrasting information with bond developments in the UK, Canada, and developing nations, and concludes: “Higher for longer is a big problem. Surging market yields are a serious issue for a banking system loaded with long duration securities portfolios. It will be a push over the cliff for troubled commercial real estate. It will be a major blow for leveraged lending and leveraged finance more generally. There are trillions of floating rate loans that will pose a much bigger issue than Wall Street has assumed. So many borrowers—individuals, speculators, businesses, and countries—planning to ride out a short and sweet tightening cycle are in for rude awakenings.”

Hard Asset Insights: Morgan explains the present strength in equities markets, and acknowledges that current developments have contributed to a “Goldilocks” moment in the markets and the economy. “The problem, however, is that Goldilocks looks temporary for several significant reasons.” He lists those reasons objectively. Higher interest rates mean higher payments on the US debt, for instance. And though they “have a stimulative effect on the financial economy and financial asset prices, higher interest rates still crush the real private sector economy on a lag.” So, while everything seems “just right” right now, the bear family seems likely to return to its co-opted house and return things to ursine normal. He also explains the impact energy costs will have on the economy going forward and how important the “quality” of the US dollar is. All of these developments offer some very real opportunities for those who understand the times. Be sure to read this week’s missive to see how.

Golden Rule Radio: Miles welcomes Rob back to the studio to conduct a middle of the year overview of the precious metals. Rob believes that we are just a few weeks from the “mid-year bottom” in the gold market. He explains that gold is typically analyzed from one of three perspectives, the seasonal cycle, technical analysis, and the fundamentals, or black swans—unforeseen events. Seasonally, gold is in the period of the year when it is characteristically down in dollar price from the rest of the year. Miles points out that the period from December to March characteristically sees highs in the gold price. Technical analysis does not diverge from seasonal analysis in this case. The hosts see the possibility of gold trending sideways or down for a short period of time. They also look at equities, showing that they have been moving sideways for several months. And they note that equities are being held up by tech, specifically artificial intelligence stocks.

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