WEALTHTRACK

Part Two: We are living in extraordinary times. We are calling it the Pandemic Pivot: the changes that have occurred or accelerated because of COVID-19 and the dramatic response to it, from economic shutdown to massive life support.  The stock market performance has been largely driven by a small group of well-known mega-cap tech stocks which explains the NASDAQ and S&P 500’s stellar performance and the lagging broader markets. Apple, Microsoft, Google’s parent Alphabet, Amazon, and Facebook make up 40% of the NASDAQ’s market capitalization and 20% of the S&P 500’s.   Is the stunning rally off of the recent March lows durable? Are stock prices running on anything other than Fed fumes?  Yes, says legendary value investor Bill Miller! He will explain why he joins us for the second of our two-part interview with him.   WEALTHTRACK Episode #1702 originally broadcast on July 10, 2020   More info: https://wealthtrack.com/all-the-reasons-to-be-bullish-with-legendary-value-investor-bill-miller/   Watch Part One: https://youtu.be/G5kee6K0lAw

We are marking the start of this season with the introduction of a new series. What we are calling the “Pandemic Pivot” - the rapid economic, market, and geopolitical shifts we are experiencing during the global health crisis. Through lockdowns and re-openings, the changes have been dramatic and swift. The huge, largely government-induced shutdown of global commerce ended the record-breaking economic recovery and the bull market in the U.S. The massive monetary and fiscal stimulus in response led to the shortest bear market in history and what could turn out to be the briefest recession ever - the jury is still out on this. To make sense of these changes, we are turning to a great investor Bill Miller, Founder and Chief Investment Officer of Miller Value Partners. This week, in the first of a two-part interview, Miller and I discuss how the world has and has not changed since the pandemic struck. WEALTHTRACK Episode #1701 broadcast on July 03, 2020 More Info: https://wealthtrack.com/a-rare-in-depth-interview-with-great-investor-bill-miller-on-what-the-pandemic-has-changed/

One of the striking financial characteristics of this pandemic stricken world has been the extreme divergence between the sickening economic reality on the ground and the out of this world exuberance in the stock market, which started long before now when businesses are slowly and sporadically being allowed to reopen. This week’s guest’s interpretation of the data is the polar opposite. He has widely followed economist, David Rosenberg, President, Chief Economist and Strategist at Rosenberg Research & Associates, Last week, in Part I of our interview, he told us the economy was already going into a recession when the pandemic hit, that it has dramatically deepened, and that unless there is a vaccine soon, which he doubts will happen, that the damage will be lasting. This week, in Part 2 of our interview with Rosenberg, he focuses on the markets. He says it is impossible to reconcile one of the highest unemployment rates since the Great Depression with the recent biggest 50-day post bear market rally in the S&P 500’s history and that something has to give. Despite the market’s impressive performance since the March lows, he remains bearish, calling the experience a classic bear market rally. In this week’s interview, we discuss what has led him to this conclusion. Rosenberg will also explain why he believes the pandemic has brought about a fundamental shift to what he calls a “Homebody Economy”, and what that means for investors. He agreed to share his list of “How to invest in the Post-Crisis ‘Homebody’ Economy” with us on our website. WEALTHTRACK #1651 broadcast on June 29, 2020 More info: https://wealthtrack.com/this-is-a-bear-market-rally-life-has-changed-homebody-investments-will-flourish-says-rosenberg/ Letter from the “Non-Bearish” Chief Economist: https://wealthtrack.com/wp-content/uploads/2020/06/Letter-from-the-Non-Bearish-Chief-Economist_Special_Report_2020_05_06.pdf

In the first of a two-part interview, Influential economist David Rosenberg explains why “nothing is normal” after the COVID-19 pandemic. This is a picture that Rosenberg has been painting ever since the pandemic hit. And well before that he was deeply concerned about the economy’s weakness and the stock market’s vulnerability. Dave Rosenberg is President, Chief Economist and Strategist at his independent economic consulting firm Rosenberg Research & Associates which he launched early this year with the stated priority of “…providing investors with analysis and insights to help them make well-informed investment decisions.” He is known for his tell-it-like-it-is commentary, independence of thought, and high conviction calls which are frequently far out of the consensus. He will not disappoint in this interview as we discuss why “nothing is normal.” More Info: https://wealthtrack.com/influential-economist-david-rosenberg-warns-life-is-going-to-change-permanently-after-covid-19/ Churchill: Walking With Destiny, By Andrew Roberts: https://amzn.to/2XXft9p

The impact of past pandemics on the U.S. economy and markets has important lessons for today says financial historian Richard Sylla, as does the record growth in both monetary and fiscal stimulus. More info: https://wealthtrack.com/the-financial-impact-of-past-pandemics-has-important-lessons-for-today-says-historian-richard-sylla/ Reading List: “Pandemics and Epidemics: Financial and Economic Effects” : https://www.moaf.org/publications-collections/financial-history-magazine/133/_res/id=Attachments/index=0/Pandemics%20and%20Epidemics.pdf Alexander Hamilton on Finance, Credit, and Debt: https://amzn.to/3dzvrfh Alexander Hamilton: The Illustrated Biography:  https://amzn.to/3cwM7mh A History of Interest Rates: https://amzn.to/3dtnJ6e

Central banks and governments around the world are pulling out all the stops to replace income lost from COVID-19 shutdowns, including as we have seen in the United States direct payments to individuals. We are devoting a WEALTHTRACK podcast this week to “Helicopter Money”, a concept coined by Nobel Prize-winning economist Milton Friedman who theorized that as a last resort in a deflationary depression the government could drop dollar bills from a helicopter for people to pick up and spend to “shock it out of a deep slump” with the “aim of boosting demand and inflation.” That theory has now become reality and our financial thought leader guest, Paul McCulley believes it signals a new era whose time has finally come. McCulley will discuss the far-reaching policy changes now occurring and why he believes many will become permanent. McCulley has been a WEALTHTRACK regular since the beginning, starting when he was Senior Partner at PIMCO where he was Founding Member of its Investment Policy Committee, author of the influential monthly “Global Central Bank Focus” and manager of its huge short-term trading desk overseeing an estimated $400 billion. Since retiring from PIMCO in 2010 he has been busy writing, speaking, and teaching. He is currently adjunct professor at Georgetown University’s McDonough School of Business and Senior Fellow at Cornell Law School. Influential economist and Fed analyst Paul McCulley says the concept of “Helicopter Money” from the government is here to stay and we are in a new era where monetary policy will play a subordinate role to fiscal actions. More Info: https://wealthtrack.com/influential-economist-paul-mcculley-on-the-lasting-necessity-of-record-monetary-fiscal-stimulus/ McCulley from the  WEALTHTRACK Archives: https://www.youtube.com/playlist?list=PLznI5J0QOR3PaQKEuSxDzoLjKWOBfvu7K

Can investing be simple? With the 20/20 vision of hindsight it sure looks that way.  Had investors just decided to stay in the U.S., invest in growth stocks, especially mega-cap tech stocks they would have hit the trifecta over the last decade or more. Has the COVID-19 pandemic changed that formula for success? It has not. If anything it seems to have accelerated and accentuated it. The extended FAANG family known by the acronym FAANGM for Facebook, Amazon, Apple, Netflix, Google’s parent Alphabet, and Microsoft recently comprised close to 24% of the total market cap of the S&P 500, topping what dot com stocks reached at the height of the tech bubble. Left in the dust by this juggernaut combination of U.S mega-cap tech are other stock market sectors including value stocks, small company stocks, and international markets, particularly emerging markets. It just so happens that those are the very areas that this week’s guest believes we should be focusing on now. He is financial thought leader, innovator, and investor Robert Arnott, Chairman of the Board of Research Affiliates, which he founded in 2002 as a self-described “research-intensive asset management firm that focuses on innovative products.” Among the innovations that he has pioneered is fundamental indexation - building indexes with stocks based on the size of their fundamentals, such as sales, profits, cash flow, book value, and dividends, not their stock price. The firm just published its new forecast for various smart beta strategies. Here are the highlights: Before getting into these contrarian assumptions I will ask Arnott how the pandemic and the policy responses to it have changed his investment views. WEALTHTRACK #1647 broadcast on May 22, 2020 More info here: https://wealthtrack.com/really-cheap-markets-and-the-pandemics-hidden-toll-with-financial-thought-leader-rob-arnott/ Research Affiliates smart beta strategies: https://interactive.researchaffiliates.com/smart-beta#!/strategies

No doubt about it. The stream of economic news is terrible. The pandemic induced shutdown of much of the U.S. economy, Europe and other countries has resulted in stunning declines in employment, income, sales, earnings, government revenues, and overall economic output. This week’s guest has been following and cataloging all of the economic and policy developments since the beginning of the pandemic and joins us with a summary and update on what it means for the overall economy, businesses, consumers, and investors. We are delighted to welcome Ed Hyman back to WEALTHTRACK to share his current outlook with us. Hyman has been voted Wall Street’s Number One Economist for an unprecedented 39 years in Institutional Investor’s annual survey. No one else comes even close to that record. He is Vice Chairman of Evercore, a leading independent investment banking and advisory firm, and the Founder and Chairman of its Evercore ISI division where he leads its economic research team. For months now Hyman’s must-read daily reports have described the condition of the global economy as being in “free fall” and the policy response as “massive”. Just recently however he noticed a slight change.  As he described it the economic data was still “really bad,” but it was also, “better.” He will describe both the “really bad” and the “better” for us. More info: https://wealthtrack.com/wall-streets-1-e…amaging-2nd-wave/

How different will our world be as the nation slowly returns to work on a state by state, city by city, business by business basis? In part II of our interview with financial thought leader, Jason Trennert, the Co-Founder, Managing Partner, and Chief Investment Strategist of leading macro research firm Strategas Research Partners he addresses the profound changes ahead. Trennert believes the COVID-19 experience and its economic aftermath will alter the behavior of countries, individuals, businesses, and investors for many years to come. He shares his assessment of the pandemic’s potential long-term winners and losers with us. If you missed his discussion last week, debating the merits of both the bullish and bearish case for the market and where he comes out. WEALTHTRACK Episode 1645 broadcast on May 08, 2020 More info: https://wealthtrack.com/covid-19-is-changing-economic-investment-behavior-in-profound-lasting-ways/ Leading investment strategist, Jason Trennert periodically sends out thoughtful and insightful thematic essays to his clients.  He believes the pandemic and its economic consequences mean profound changes ahead for individuals, businesses, and investors. He was kind enough to share his viewpoints with us. FREEDOM IN A FRACTIONAL RESERVE SOCIETY I and II Long-Term Losers From the Pandemic: https://wealthtrack.com/wp-content/uploads/2020/05/TRENNERT-Pandemic-Losers.pdf Long-Term Winners From the Pandemic: https://wealthtrack.com/wp-content/uploads/2020/05/TRENNERT-Pandemic-Winners.pdf

This week’s guest was concerned about high market valuations before the global pandemic hit and was recommending clients raise some cash.  It’s a call he and his team have reiterated since. He is Jason Trennert, Co-Founder, Managing Partner and Chief Investment Strategist of Strategas Research Partners, Trennert and his team have been busier than ever assessing the macro effects of the pandemic shutdown including policy, the public, and private sectors of the economy and the markets. In a recent report to clients, Trennert laid out the main arguments in the bull vs. bear debate and where he and his team stand now.  As he put it, “In times of acute stress in the markets, I find myself doing less modeling and more thinking.” We asked him to share his investment thoughts. WEALTHTRACK #1644 broadcast on May 01, 2020 More info: https://wealthtrack.com/leading-investment-strategist-jason-trennert-lays-out-the-bullish-vs-bearish-cases-mid-shutdown/