This week we begin by taking a look at an interesting article by Howard Marks about investment mistakes. We then get some perspective on the forecasts made by the Federal Reserve. We delve deeper into the ECRI’s (Economic Cycle Research Institute) continuing forecasts of a coming recession. We conclude with an article that makes a good case for investing in gold.
It’s All A Big Mistake- Among well-known investors, Howard Marks is one of the deep thinkers who often sheds light on important market issues. This month the Chairman of Oaktree writes about investment mistakes and problems with efficient market theory. How do these mistakes figure into the process of managing risk in the portfolio? Here is Howard Marks’ take on it: http://www.oaktreecapital.com/memo.aspx
The Fed And Goldilocks Economic Forecasting- It’s been our feeling that Federal Reserve projections are often too optimistic. Lance Roberts goes a bit further, stating that they should never be taken at face value. In this article, he uses graphs to compare the Fed forecast to actual results for GDP, unemployment and inflation. http://advisorperspectives.com/dshort/guest/Lance-Roberts-120622-Fed-Forecasting.php
Economic Cycle Research Institutes (ECRI) Recession Call- Each Friday, the ECRI updates its Weekly Leading Indicator (WLI). Investors who follow the WLI saw it slip again last week. The founder of ECRI, Lakshman Achuthan, has made repeated forecasts of a coming recession in recent interviews. Here is a look at the figures behind his statements: http://advisorperspectives.com/dshort/updates/ECRI-Weekly-Leading-Index.php
An Ending Made For Gold- Given the situation in Europe and the likelihood that additional Euros will be printed, Frank Holmes makes a good case for gold. http://advisorperspectives.com/commentaries/global_062212.php
We hope you enjoy reading these articles along with us and that you find them informative.
John R. Day and Bill W. Ennis