August 2024

Jerome Powell has pretty much declared victory on inflation. How's that going to affect you and your portfolio? With the beautiful backdrop of the Teton Mountains in Wyoming, every year there's an annual gathering of central bank leaders from all over the world, and everybody's listening with bated breath to what these people are going to say. This year Jerome Powell, the Fed Chairman, pretty much declared victory on the three-year fight against inflation. It's clearly going to drop down as low as 2%, which is great news, but the Fed has a dual mandate. Its mandate is not just to control inflation, it's also to seek full employment. Some would say that those are conflicting mandates, but yet somehow the Fed's done a pretty good job targeting both. Now that Jerome has pretty much indicated that we can expect interest rates to drop as much as two percentage points...

As Wall Street’s volatility spikes, what opportunities exist for you? For months we’ve been discussing the risks of the Magnificent Seven (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla) and how a market so tightly aligned with those Magnificent Seven is also at risk. Since Friday, we’ve seen the Magnificent Seven shed $1 trillion in market value. Why is that? We’re seeing the hype of AI fail to match the reality, economically. There are real risks facing the chip-making industry. Most notably, we have TSMC out in Taiwan. The risk against Taiwan from China is significant, and risk to the global chip-making capacity is even greater. Just last week, it was reported that Warren Buffett pared his exposure to Apple by 50%. He believes in it in the long run, but he clearly feels that this run-up has gone as far as it should. Apple is down 6%, Nvidia...