Thoughts From the Frontline, October 2004

Premise #3: A Falling Dollar

October 29, 2004

In March of 2002, I wrote an e-letter entitled "King Dollar and the Guillotine," which as the title suggests was a quite negative view of the future prospects for the dollar. Two weeks earlier, I had written a bullish letter on gold, having been bearish (really more agnostic) on gold for years. Since that time, we have seen gold and the euro rise over 50% from the cycle bottoms in dollar terms. Other currencies have not risen against the dollar at all. The Chinese Renminbi is exactly where it...

The Bottom Right Hand Corner

October 22, 2004

What makes one person a pessimist and another an optimist when speculating about the future of the US and the markets? How do we come to our most basic assumptions? This week we look at some insights into human nature I picked up in Tahoe at George Gilder's Telecosm, as optimistic a gathering of bulls I have ever been to. I close with a few quotes from here and there on Fed policy and Muddle Through. I think it will stir your thought processes a little.

Let's set the stage. I am sitting in...

Premise #2: The Muddle Through Era

October 15, 2004

We are doing a series on my basic investment premises: the themes which drive my overall investment strategies. Last week we looked at some of the reasons why I think we are in a secular bear market. This week we look at my Major Premise #2: We are in a long-term Muddle Through Economy.

A few years ago, many readers thought I was far too optimistic thinking things would not get worse than Muddle Through. Now I seem like some troglodyte bear as the economy is doing well (see more optimism...

Elections, Recessions and the Economy

October 8, 2004

What are the basic premises which determine your investment portfolio? Is there a consistency to your thought, or is your portfolio a blend of ideas which may not agree with one another? How sound do your ideas appear when subjected to critique? This week we start a series on my basic investment premises and then see how those premises should perhaps inform your investment portfolios.

This series comes courtesy of an idea triggered by last week's letter. I was talking about a CIA researcher...

Horse Racing and the CIA

October 1, 2004

This week we explore in depth an essay on how we think from that bastion of investment analysis, the US Central Intelligence Agency. We look at the rookie mistakes made even by pros. I describe one of my own more embarrassing rookie moments and how it highlights an investment principle that the best performing professionals always keep in mind. I finish with a note on what you can give me (and your friends) for my birthday. It should make for a lively letter.

One of the things I try to get...