Our National Predicament: Excerpts from Seth Klarman's 2010 Letter
Via My Investing Notebook.
Yet another long-term risk confronts investors: the government's fiscal and monetary experiments may go awry, resulting in runaway inflation or currency collapse. Bottom-up value investors would not wish to bet the ranch on a macroeconomic view, but neither would they be wise to ignore the macroeconomy altogether. Disaster hedging – always an important tool for investors – takes on heightened significance in today's unprecedentedly challenging environment. Yet, as this insight is not unique to us, the cost of insurance is high. There are no easy ways to navigate these turbulent waters. But because the greatest risks are of currency debasement and runaway inflation, protection against a currency collapse – such as exposure to gold – and against much higher interest rates seem like necessary hedges to maintain.
- 2010 Repost: Wsj Op-ed: Open Letter To Ben Bernanke
As talk of QE3 remains in the headlines, I thought it might be a good time to review this Op-Ed, which was signed by Seth Klarman, Jim Grant, Jim Chanos and Niall Ferguson, among others, in November of 2010. The following is the text of an open letter...
- Debt And Delusion - By Robert J. Shiller
Economists like to talk about thresholds that, if crossed, spell trouble. Usually there is an element of truth in what they say. But the public often overreacts to such talk. Consider, for example, the debt-to-GDP ratio, much in the news nowadays in Europe...
- Wsj Op-ed: Open Letter To Ben Bernanke
Signed by Seth Klarman, Jim Grant, Jim Chanos and Niall Ferguson, among others: The following is the text of an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, along with investors and political strategists, most of...
- 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...
- Hussman Weekly Market Comment: Implications Of A Likely Economic Downturn
A week ago, we accumulated enough evidence to conclude that the U.S. economy is most probably headed into a second leg of recession. It is unclear whether this will be identified as a second recession or a continuation of an existing downturn. In either...