Unstable Economic Equilibrium
+ Jim Simons, Hospitality, Asset Allocation Strategies, Household Stock Allocations & More
“Money is like a bar of soap. The more you handle it, the less you have.”
— Eugene Fama
Research
Apollo - 2024 Mid-Year Outlook: An Unstable Economic Equilibrium (28 pages)
Torsten Slok says the U.S. economy is in the middle of a tug of war between the lagged effects of Fed rate hikes and the easing of financial conditions since December 2023. He expects above trend economic growth, strong consumer spending, stubborn inflation, and higher for longer interest rates with no Fed cuts in 2024.
Endowment asset allocations: insights and strategies (20 pages)
This paper highlights the importance of asset allocation in portfolio performance, along with the relevance of various asset classes (including International Equity, Real Estate, and Natural Resources) over time.
Facts & Figures
Money market funds are currently paying around $500 billion in dividends - that's 2.5% of annual consumer spending. Link
Americans have $17.5 trillion in commercial bank accounts, with the average savings account getting just 0.45%. Link
Even though golf clubs have become more advanced since the 1990s, they’re 60% cheaper. Meanwhile, the price to play a round of golf has gone up 25% in the last three years. Link
According to Bank of America, corporate client buybacks between June 3-7 were the second-largest in their weekly history since ‘10. Link
U.S. household stock allocation has reached an all-time high. Link
The number of Private Equity portfolio companies has doubled over the last decade.
S&P 500 companies have been generating more cash flow over the past 3 decades.
“The pace of Japanese firms’ announcements of outward mergers and acquisitions this year has been the fastest since 2019.” Link
We've already seen more inflation in just 53 months of the 2020s decade than in the entire decade of the 2010s. Link
Podcasts
This Week in Startups: Lessons in Unreasonable Hospitality with Will Guidara: Guidara explains how topics from his book Unreasonable Hospitality relate to all businesses, how to turn customers into advocates for your brand, and what it was like to see parts of the book on the show The Bear. [6/14/2024 - 66 minutes] Apple | Spotify | YouTube
Huberman Lab: Dr. James Hollis: How to Find Your True Purpose & Create Your Best Life: Andrew Huberman speaks with Dr. James Hollis about finding and pursuing one’s purpose in life. [5/13/24- 159 minutes] Apple | Spotify | YouTube
The Numberphile Podcast: The Hyper-Curious Billionaire - Jim Simons (1938-2024): This episode looks back at Jim Simons’ love of math, approach to philanthropy, and philosophy towards life. [6/6/2024 - 37 minutes] Apple | Spotify | YouTube
What Else Is Happening
Did you miss last week’s email?
Meb Faber spoke with Herb Greenberg about business journalism, spotting frauds and his new business venture.