The Investment Partners Fund

Don’t confuse a Bear Market with brains: The 1970′s analogy

We have probably been in a secular bear market since the tech sector imploded in 2000 and there may still be 10 years to go.

Along the way, we have experienced Greenspan’s mortgage stimulus and the subsequent crash in U.S. real estate and then in stocks in 2008.

Bernanke and other central bankers’ solution was to add ‘Vodka to the punch bowl’ with QE I & II.  This has resulted in tepid growth, no material improvement in U.S. employment, but has inspired asset inflation and a competitive devaluation environment. You can’t print money on this scale without devaluation and accompanying inflation kicking-in. This is being exacerbated by 2 billion emerging global consumers. Technology is facilitating revolution across North Africa and the Middle East. Food inflation is dangerously out of control. China is banker to the U.S. and they are raising interest rates to quell domestic inflation and speculation. Meanwhile, the U.S. is living in a dream world of artificially low interest rates (0 to .25%) and buying their own paper.
It just doesn’t add up and something has got to give.

Unfortunately, there isn’t a Paul Volcker on the horizon.

Investors are back in the markets, frustrated by low (or no) fixed income interest rates. They are now riding the momentum of the devaluation and inflation inspired bear market rally; remarkably complacent about risk. How quickly they have forgotten the reality of 2008.

The challenge for all of us is to produce reasonable risk adjusted returns from the equity portion of our portfolios, while eliminating the type of currency risk that Robert Lendvai wrote about the other day.

Where’s the Money Gone?

A British Investment Banker Explains What Happened During The Financial Crisis

Markets roared back in the second half of 2010 and Porsche dealers the world-over are once again seeing investment bankers lined up outside their doors with fat bonus cheques in hand. Leave it to the British to poke a bit of fun at their bankers and their mishandling of the financial crisis.

While the banter is funny, I can’t help but feeling most of it is also painfully true.

The Day After the US Dollar Crashes

Not all horror flicks involve slashers, chainsaws and high school cheerleaders. ”The Day After the Dollar Crashes” is a polished video that’s easy to follow and just a tad scary. The video was made to promote a new book by Hedge Fund Manager, Damon Vickers. In his book and video, Damon describes a hypothetical situation that could that could lead to a run on the mighty Greenback.

While Vickers’ apocalyptic warning may seem extreme, the extraordinary economic events of the past few years would have also been difficult to fathom just five years ago. Watch it and you might just find yourself stashing all your spare change under the mattress (or investing with us).