Iron Capital’s quarterly review of capital markets performance and updated market forecast.
President Trump. It is hard to argue that there was a bigger story in the fourth quarter of 2016 than the election of Donald Trump as the President of the United States. To be honest I wish there was, but as they say, “it is what it is.”
It is often easy to know what is going to happen in the market. It is hard to know when it is going to happen. We have been harping on the uneven distribution of returns in the market for what seems like forever. The short‐term traders’ fixation on central banks and record low interest rates has driven the so…
If one were to look up the law of diminishing returns he would see something boring like an explanation about why incremental productivity gains of adding an employee get smaller with every employee added. Central bankers have not, however, seemed to learn the law of diminishing returns.
From an investors point of view there is no greater force in the universe than reversion to the mean. The spread must shrink. Growth has been in favor for a long time but it may be getting close to a time where Value will once again be in vogue.
History will look back at the aftermath of the financial crisis of 2008 as a glaring example of the dangers of reactionary regulation. Don’t get me wrong regulation – rules if you will – is absolutely necessary but like many things in life it needs to be treated with respect.
