Ouch! The S&P 500 ended the first half of the year with its worst performance since 1970, down more than 20%, cementing its bear market status. And the recession drumbeat is getting louder. This morning, leading Wall Street economist, Nancy Lazar told clients “a recession is coming sooner than you think” PiperlSandler’s Global Chief Economist blames “sticky inflation”, “very aggressive Fed tightening, and a “severe corporate profit recession” for her forecast of a mild recession with the economy contracting starting in the final quarter of this year into the first half of next year.  But this week’s WEALTHTRACK guest is way ahead of her and the few others just joining the recession club. He’s been warning clients about the likelihood of a downturn for months.  Our guest is David Rosenberg, President, Chief Economist, and Strategist at his independent economic consulting firm Rosenberg Research which he founded in January 2020. High inflation is at the top of the Federal Reserve’s, Washington's, and Wall Street’s list.  Rosenberg says they are looking at the wrong numbers and that disinflation is already taking hold.  Interest rates are expected to go higher for longer.  Rosenberg cites evidence of economic slowing which will require easing sooner than expected.  As I just mentioned, the likelihood of recession is still being debated. Rosenberg is forecasting a recession this year.   What about the already steep bear market decline? Rosenberg warns about the lure of bear market rallies.  Which prevailing views is Rosenberg challenging now? WEALTHTRACK Episode 1901 broadcast on July 01, 2022  More info: https://wealthtrack.com/influential-prescient-economist-dave-rosenberg-warns-of-imminent-recession-an-extended-bear-market/

Remember when some fans of cryptocurrencies called them non-correlated assets? They were supposed to behave differently from the stock market, not affected by traditional economic, political and fundamental forces? Cryptocurrencies were also dubbed digital gold, in the expectation they would hold their value in inflationary times.  Neither has turned out to be the case. Bitcoin, the dominant cryptocurrency has fallen far more than the S&P 500 year to date, and in the face of higher inflation Bitcoin plummeted while gold has held its own. Crypto advocates point out that Bitcoin has fallen by more than 50% eight times since its 2009 launch, and three times since 2018, and it’s recovered every time. And it’s been a top-performing asset class with better than 35% annualized returns over the last three and five-year periods and 80% annualized returns over ten years. In addition, an entire crypto industry has developed, which is expanding rapidly and being widely accepted by Wall Street, businesses, and some governments.  This week’s guest is a believer. He is Matt Hougan, Chief Investment Officer and former Global Head of Research at Bitwise Asset Management, a cryptocurrency asset manager founded in 2017. I began the interview by asking Hougan about the role crypto assets play in a portfolio, considering they act like stocks.  WEALTHTRACK 1852 broadcast on June 24, 2022 More Info: https://wealthtrack.com/big-declines-are-normal-and-cryptos-potential-is-on-track-says-bitwises-cio-matt-hougan/

75 basis points: the biggest rate hike by the Federal Reserve since 1994 with additional aggressive moves expected. It looks like Fed Chair Jerome Powell is proving the naysayers wrong, who doubted he had the stuff to fight inflation. As influential Fed watcher Paul McCulley told WEALTHTRACK months ago Powell will “do whatever it takes” to fight inflation, just like Paul Volcker did in 1979/1980. Volcker succeeded, setting up conditions for the great bond bull market of the last 40 years but caused a serious recession to do it. How do you manage through a cycle of rising interest rates and higher inflation? There aren't too many money managers who have that experience and have a track record of excellence through many different types of markets. This week’s guest does. She is Mary Ellen Stanek, Co-Chief Investment Officer of Baird Advisors. Stanek was recently named Morningstar’s Outstanding Portfolio Manager of 2022 for her “disciplined and risk-aware approach, thoughtfully navigating various market environments,... and generating impressive absolute and risk-adjusted returns” in her 22 years at Baird.  I interviewed Stanek a few days before the Fed meeting but she was prepared for it. We talked about the need for the Fed to get more aggressive in word and deed - which they did, where we are in the interest rate cycle - early days yet, and why she says “bonds are back!”  WEALTHTRACK #1851 broadcast on Jun 17, 2022 More info: https://wealthtrack.com/morningstars-outstanding-portfolio-manager-of-2022-mary-ellen-stanek-says-bonds-are-back/ Related: Investment legend Jeremy Grantham is known for his prescient forecasts of some major turning points in the markets over the years including his “epic bubble” characterization last year. He elaborated on the theme on WealthTrack saying that not only was the stock market trading in the stratosphere but so were the housing, commodity, and bond markets, the latter being the biggest bubble of them all.   https://www.youtube.com/watch?v=c13O6Amn1lQ Paul McCulley on Fed Rates: https://youtu.be/Z0KSdIOkcxw

In a WEALTHTRACK exclusive legendary financial thought leader, Charles Ellis explains why after decades of searching for outstanding money managers he has become a big believer in indexing. WEALTHTRACK Episode 1850 published on June 9, 2020 More info: https://wealthtrack.com/legendary-investment-consultant-charles-ellis-makes-a-compelling-case-for-indexing/

Part 2 of 2 Candid career advice from three super successful women portfolio managers. Causeway Capital’s Sarah Ketterer, Capital Group’s Karen Choi, and Canyon Partner’s Robin Potts share their victories, setbacks, and strategies as they tear down the pink wall.   WEALTHTRACK #1849 published on June 3, 2022  

Part 1 of 2 The investment opportunities surfacing in the volatile stock, bond, and real estate markets. Causeway Capital’s Sarah Ketterer, Capital Group’s Karen Choi, and Canyon Partner’s Robin Potts share their perspectives. WEALTHTRACK #1848 published on May 27, 2022

2022 has been a rough year for investors as financial markets have declined across the board. No matter what the market performance, investors continue to favor passive index funds over actively managed ones.  Investors continue to favor ETFs, and exchange-traded funds over mutual funds. The vast majority of funds in ETFs are in passive strategies, but there’s an interesting divergence occurring. One of the fastest-growing segments in the ETF universe is actively managed ETFs.  This week’s guest is involved in both actively managed mutual funds and ETFs and one of his main responsibilities is identifying best-in-class managers for both. He is Kristof Gleich, President and Chief Investment Officer of Harbor Capital Advisors. Prior to joining the firm in 2018, he was Global Head of Manager Selection at JP Morgan Chase.  Harbor Capital is well known within the investment management industry but not in the general public. Begun as the pension advisory arm of old-line packaging manufacturer, Owens-Illinois, Harbor Capital became independent over 30 years ago. It is known for choosing top-quality independent money managers to run specific mutual funds under the Harbor Capital name.  It currently oversees $55 billion of targeted strategies. It also recently launched a suite of actively managed ETFs, some with unusual strategies which we will discuss.    I began the interview by asking Gleich to take us through the process of choosing money managers to partner with, who have what he calls an “alpha edge”.    WEALTHTRACK #1847 broadcast on May 20, 2022 More info:

If you were to ask investors to name the biggest headwinds facing the markets,   higher inflation and interest rates and their potentially negative impact on corporate earnings would top the list. Just about everyone on Wall Street agrees we are in a new era of higher levels of both. But this week’s guest believes there is another area that poses even greater challenges to the global economy and markets: energy.   Energy is under enormous pressure on numerous fronts: geopolitical, production,  distribution, and financing. It’s a combination creating a new era of energy insecurity.  Our guest is Tom Petrie, a long-time thought leader in the oil and gas industry.    Since 2012 he has been Chairman of Petrie Partners, an influential investment banking and consulting boutique to the industry.  What is happening with U.S. energy independence? After decades of decline, U.S. oil production picked up significantly in the last decade and a half, largely thanks to the shale oil revolution, to the point where it surpassed Russia and Saudi Arabia’s output to become the world’s largest oil producer.  Despite that achievement, Petrie says the U.S. and the rest of the world are now approaching a possible energy crisis caused by a number of factors. One of the biggest: some new geopolitical realities, what he calls geopolitical fragility. We will discuss them at length as well as why he believes the current elevated levels of oil prices are unsustainable and why the outperformance of traditional energy stocks is as well!  WEALTHTRACK #1846 broadcast on May 13, 2022 More Info: https://wealthtrack.com/rising-global-energy-insecurity-and-its-impact-with-industry-thought-leader-tom-petrie/ Bookshelf: Following Oil: Four Decades of Cycle-Testing Experiences and What They Foretell about U.S. Energy Independence https://amzn.to/3FM4ymZ

Are you feeling at all overwhelmed by the pace and degree of change we are experiencing in the world, the economy, the markets, life in general? A series of head-spinning turns in events ranging from rising inflation and interest rates, Russia’s relentless and brutal assault on Ukraine, and a surprise leak of a draft of a  momentous Supreme Court opinion are perfectly encapsulated by the dramatic market action of the last two days. After the Federal Reserve raised short-term interest rates by half a percentage point (50 basis points) on Wednesday the Dow experienced its largest gain since 2000, up more than 900 points, nearly 3% to 34,061.06. Investors were evidently reassured by Fed Chairman Jerome Powell’s comments that the central bank was not “actively considering” raising rates by a sharper three-quarters of a percent (75 basis points). That reassurance turned to doubt on Thursday when the Dow made a U-turn, falling 1,063 points, a 3.1% drop, its largest decline this year. As we have covered in several recent WEALTHTRACK episodes there appears to be a new world order emerging on several fronts which calls for new investment approaches. But what will the new order look like? How lasting the changes, and what are the best investment responses? This week’s guest has the breadth, knowledge and experience to tackle all those questions and more. She is a long-time investment star who has never lost her influence or cool. She is Abby Joseph Cohen, now a professor at Columbia Business School, teaching the popular and oversubscribed “Future of the Global Economy” course which she has been doing as an adjunct professor since 2014. I am delighted she is with us to discuss the contours of the new world order and their impact on the economy and markets. WEALTHTRACK #1845 broadcast on May 06, 2022 Bookshelf: The Black Swan: Second Edition: The Impact of the Highly Improbable https://amzn.to/3w3OLvA

What do you do when your flagship fund goes from the top of its class to close to the bottom in a matter of weeks? From market trouncing to market lagging? That is the challenge facing this week’s guest.  Alex Umansky, Portfolio Manager of the Baron Global Advantage Fund which he launched at the firm of legendary growth manager Ron Baron in 2012. Umansky oversees about $2.4 billion dollars in assets at Baron Capital including $1.7 billion at his flagship Baron Global Advantage Fund. However, in mid-November of 2021, the bottom fell out for the majority of its holdings.  Global Advantage went from a 20% plus gain to a less than one percent gain by year-end, while its benchmark and competition fared much better. So far this year the fund is down 33% and lagging badly.   In a wide-ranging discussion, Umansky discusses what’s changed and what in his mind hasn't, which is why he is doubling down on some of his hardest-hit holdings and is convinced they will be long-term winners.   WEALTHTRACK #1843 broadcast on April 22, 2022