ACTION POINT
HAVE FAITH IN THE RESILIENCE OF THE U.S. ECONOMY
HAVE FAITH IN THE RESILIENCE OF THE U.S. ECONOMY
- Contractions are caused by:
- Excesses in important sectors of the economy
- Overheating and “irrational exuberance”
- Prices and inflation spike
- Federal Reserve tightens monetary policy
READ: “SOCIAL VALUE INVESTING: A MANAGEMENT FRAMEWORK…”
Social Value Investing: A Management Framework for Effective Partnerships
By Howard Warren Buffett and William Eimicke
- Public, private, philanthropic partnerships can work
- Neither sector can solve global challenges by themselves
- Working together can be more effective in addressing big issues such as inequality, climate change, affordable house, healthcare & food insecurity
- Buffett & Eimicke show examples of effective & ineffective ways to partner
READ OR REREAD BUFFETT
Read or reread Buffett: The Making of an American Capitalist
- fascinating & detailed portrait
- experiences that shaped him
- obsession with making money
- evolution of investment approach from Benjamin Graham classes
INVEST WITH FUNDS AND FIRMS THAT ARE COMMITTED TO PATIENT INVESTING
INVEST WITH FUNDS AND FIRMS THAT ARE COMMITTED TO PATIENT INVESTING
- Short-term oriented world
- Investors under pressure to fire underperforming funds and hire outperforming funds
- Most investment managers and firms don’t have patience, ability or desire to stick with long-term strategy
OWN SOME U.S. TREASURIES
OWN SOME U.S. TREASURIES
- Safe haven asset class in recession eras
- U.S. rates higher than other developed markets
- Longer maturity = more dramatic price moves
- Every 1% decline in yield:
- – 2-yr Treasury note value + 1.9%
- – 10-yr Treasury note value + 8.6%
- – 30-yr Treasury bond value +19.1%
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