INSIGHTS
Wind in the Willows
VCs are Betting on Mining Deals… Why?
There are obviously a lot of reasons why mining might be attractive.
Buffett’s Homebuilder Bet
When the greatest investor in history makes a sizable bet… it’s probably a good idea to pay attention, right?
Moody’s Downgrades Regional Banks
Moody’s is one of the big three ratings agencies, and considering recent news of Fitch downgrading the US Government to AA+, it seems they were due to make some headlines
No More Cheap Stuff – Light A Candle And Curse The Glare
It may not be intuitive to the lay person why a private investment company with a history of real estate investments would care about international trade.
Fitch Downgrades USA
Fitch joined S&P with a rating one notch below their best rating at AA+
Direct Lending Slowing?
There are a lot of misleading headlines out there. Last week, the one that stuck out to us suggested that private credit and direct lending were slowing.
AT&T, Bud Light, and Why ESG Matters to Every Investor
Investors in AT&T got an ugly surprise when the WSJ reported that many of the lines are still in the ground contaminating soil and drinking water.
Pay is Beating Inflation - Everybody’s Playing in the Heart of Gold Band
That’s right, earnings season has started, big banks have crushed lowered expectations, and everything is awesome....inflation is a thing of the past.
Cash Pile – Market Sentiment or Earnings Yield?
Cash assets under management are at $7.8 Trillion according to Bank of America. This is an astounding number, and, in many cases, investors could look at this number as a sure sign of economic fear globally. In fact, as it currently stands, this number factors heavily in to BofA’s “Bull & Bear” indicator, which
PE Maturity Wall
PE Maturity Wall. Last week, PitchBook, one of the global authorities on all things private investing, brought up a fascinating point.
The Dreaded Down Round – Don’t Think About What You Left Behind
The Dreaded Down Round. Discounting using interest rates or the consequences of asset allocation, work together throughout economic cycles
Fed Funds, International Central Banking, and Multifamily Real Estate
Fed Funds, international central banking. On Wednesday of last week, the Federal Reserve made its highly anticipated pause in interest rate hikes following CPI Data that suggested that inflation continues to cool. The 4% print was in line with expectations and continues a downward trend that has been in place since June of 2022. Thankfully, it was low enough to warrant pausing to reassess the effectiveness of rate increases from the last year and a half. As we have mentioned in the past, we do not anticipate a rapid decline in rates because while 4% is still getting better, it is still double the Fed’s target of 2%.
The Stock Market Looks Set Up, Like A Bowlin’ Pin and Oil Looks Like Roy Munson
As is often the case, the Stock Market activity does not match up well with headline information or what is expected for earnings going forward.
Too Big to Fail Means “Safe”?
In today’s episode of Regulatory Roulette, we’re reminded of the phrase “Too Big To Fail” and what it meant in the darkest days of the Global Financial Crisis. This phrase was used to discuss the biggest and nastiest of our systemic issues as Lehman Brothers failed and AIG, Citigroup and others teetered before TARP ultimately came to the rescue. Today, it’s means something different.
The Finger Pointing Game
We’ll gladly get on board and criticize the Fed for any number of things. Money printing in the months following the initial shock of Covid, not raising rates after the Global Financial Crisis, chickening out late in 2018 during the “Taper Tantrum”…the list goes on. But to suggest that the ills of the banking system and commercial real estate markets are “all their fault”? Well that’s a step too far for us.
Rent Growth – There is a Road, But it’s No Simple Highway
2022 ended with a giant thud for rent growth. As can be seen in the charts below, vacancy rates were up and rent growth was negative by more than it has been in a long time. As 2023 began, the picture appeared slightly rosier for the asset class. Vacancy rates continue to head higher, but a resilient renter has meant 2 months of positive rent growth. This is far from intuitive given recent layoff headlines.
VC to Slow Following SVB Collapse
Years ago, a colleague/mentor shared a truth about the investment industry that few people stop to think about. You can be a good investor, or you can be really good at the investment business…very few people are both. In an ideal world, investment managers combine people with both skills for ultimate success, but few ever find the right mix. But what’s the difference: A good investor, buys low, sells high and manages the risks between. Someone who is good at the investment business is generally really good at gathering assets.
Who is TINA? Doesn’t Matter, She’s Been Replaced
TINA, or There Is No Alternative, has been a common refrain from public market investors the last several years.