Money and Finance

Pershing Square - Bill Ackman's 2nd Quarter Letter

The Dollar, Inflation, and Risk to One’s Purchasing Power

In light of the large amount of credit creation, quantitative easing, and dollar printing that has recently taken place in the United States, it is reasonable to be concerned about the future buying power of the dollar and the prospect of higher interest rates that will be necessary to induce investors to purchase Treasury securities. Some investors have chosen to hedge these risks by buying gold. In that gold does not generate cash flow, it does not have any intrinsic value in our opinion. Thus, we have chosen to reduce the interest-rate risk and dollar weakness risk of our portfolio by owning high quality businesses that have pricing power due to market position and/or business model, and/or that earn their profits globally.

- East Coast Asset Management's Quarterly Letter
Found via Market Folly.Our primary investment objective is to strive to achieve superior long-term capital growth with minimized risk of loss. We conclude the attribution of our success historically has been and we feel will continue to be through studying...

- Annaly Salvos: On The Value Of Insurance
How to value gold is an age old frustration. As every schoolboy knows, it yields nothing and so can’t be valued on cash flows. It has very little industrial use. There is, however, a natural human tendency toward the use of currency so gold is an obvious...

- Howard Marks Memo: Tell Me I’m Wrong
My readers treat me well. They indulge my penchant for dissecting the past, and they send kind messages of encouragement. To repay their generosity, I’m going to venture into something I usually avoid: the future of the U.S. economy. This memo won’t...

- Advisor Perspectives: Au Revoir Jean-marie Eveillard: A Final Interview
Which worries you more – a decline in the dollar, rapid inflation, or deflation? How are you positioning your portfolio to defend against these scenarios? We have many worries, but we are not positioned against any particular outcome. Our top-down...

- Why I Prefer Dg Stocks To Bonds
With today's low interest rates a lot of income seeking investors have switched to DGI. I would like to think that many would be converted to stick with DGI because it offers much more protection in your purchasing power than bonds do. The ultimate...

Money and Finance