“Now I suppose you’re thinkin’ I’ll bet he is sinkin or he wouldn’t get in touch with me”.
Rod Stewart and Martin Quittenton
Well, you’re half right anyway. I am sinkin’. But not get in touch with you? I thought you knew me better than that. Sinkin’ or risin’, I’ll always be in touch.
Meantime, having nothing to do on this hot afternoon, I’m trying to write a line, an elegy — a poem of reflection, a lamentation for the dead. For Beppie. Who we lost last week (ironically, on the 30th anniversary of the death of underappreciated VU guitarist Sterling Morrison). Not being a poet, I’ll do the best I can in terms of lyrical flourish. As a start, I’m lifting quotes from my favorite song: “You Wear It Well”. The one I danced to with my daughter. At her wedding. Where Beppie was an honored guest.
Beppie had been my friend for more than 40 years. But we didn’t start out that way. Our beginning, marked by religious and philosophical differences, along with optically conflicting agendas, was, shall we say? A titch icy? But ice melts, and when ours did, a warm friendship emerged. One that was informed but went beyond her being my mother-in-law, grandmother of my children, and great grandmother of my four grandsons. When each these beautiful laddies was born, she would call me with congratulations. To which I always responded:
“Beppie, I couldn’t have done it without you”.
Which was true, biologically and in other ways.
But seeing as how, in addition to being an elegy, this is a space is devoted to all matters relating to the markets, you should be made aware of this:
Beppie was the best damned trader I ever came across. And I’ve worked with some stone-cold legends – Stevie, PTJ, the current Treasury Secretary among them. Over the past ~40 years (or any subset thereof), her track record obliterated theirs – on both a nominal and risk-adjusted basis. She traded exclusively prominent American stocks, long only, with no tools at her disposal other than her own wits and the materials provided to any schmuck of a retail investor that cares to open an account.
Yet never a down year. And overall average of ~25%.
How did she do it? Beats the hell out of me. But what I can to discern is that much of it is owing to her having developed a comprehensive, well-adapted methodology, and sticking to it. Which is a great deal more than I say about any number of professional investors with whom I have had the pleasure to interact – across my (arguably over-long) career.
She paid attention to trends – particularly in Retail. Read every research report upon which she could get her hands. Watched the markets on a tick-by-tick basis. Always meticulously planned her time horizon and price entry/exit points.
Plus, it must be stated, she just had that certain je ne sais quois. That indefinable edge. Like Stevie. Like Paul. You didn’t want to sell what she was buying. Or buy what she was selling.
And, other than routine performance setbacks which investors of her pedigree know to be opportunities in disguise, I never knew her to fail.
About than 10 years ago, I gave her some of my money to manage, and let’s just say that them Bejaminz proved prolific, were fruitful and multiplied. In the wake of her passing, I am left, from a market perspective, with two primary regrets: 1) that I didn’t give her more of my cash to invest; and 2) that she is no longer here to work her portfolio management magic for me.
In pertinacious turn of fortune, I was not entirely unprepared for this. Beppie had been sinking for the last several months, unable, all year, to trade. So, I’ve been forced to fend for myself for some time. I left the portfolio alone until a few weeks ago, when, on my own (and I am extremely proud of this accomplishment) I managed, somehow, to execute a transaction – specifically the sale of some NVDA, which represented a disproportionate percentage of my overall risk profile.
Which goes to show that even with the gathering of the Great Beppie to the dust of her forebears, the world marches on. Each of us is assigned our time slot, and perhaps hers had fairly run its course. Even for me, matters are moving beyond the scope of my easy understanding.
Consider, for instance, that at long last, the number of listed ETFs now exceeds that of plain old stocks:
I’m having a hard time understanding how this can even be a thing. But that, I reckon, is beside the point.
And as for Beppie – she was always a single stock kind of gal – none of this ETF monkeyshine for her!
Thus, perhaps in some perverse way, the heavens were sending signals to her that her time had passed. As it will, eventually, for all of us.
The logic of more and more of what is transpiring before our eyes escapes and worries me. But not much of this is immediately revelatory.
AI models are assigned culpability for multiple suicides, murders and other breakdowns of decorum. Is genocide next on the menu?
U.S. taxpayers, widely known as the world’s greatest technology engineers, are now in the microchip production business. State governors seek to outflank one another in gerrymandering frenzy – not disguising, in fact celebrating, the undiluted political agenda driving these efforts. Federal troops have subsumed local police in multiple jurisdictions – including our nation’s capital. More such activity is on the horizon.
Annoy Team 47 Insiders and you get busted down to the ranks, demoted, for instance, from running the IRS to being named Ambassador to Iceland. Run a department that pumps out some statistics inconsistent with the prevailing political narrative and you get disappeared altogether.
What concerns me most acutely now, however, is the emerging takeover of the Fed by the President and his minions. At this point, one can neither deny nor ignore their acquisitive intent. Their Goon Squad is digging up dirt on FOMC voting members — anywhere the earthy stuff may be found — and is well on its way to co-opting the entire commission.
But this, to me, is simply the prelude to a plan the ultimate objective of which is to subsume the Central Bank into the Executive Branch. And I shudder to contemplate the near and longer-term implications. As a pseudo independent entity, lord knows it’s political enough. Place it inside an administration – inside this administration – and we can forget about any pretense of sound custodianship of the money supply and Interest Rate Complex.
If a Trump-controlled Fed operated in any mode like their management of International Trade Complex, we can anticipate the shifting of monetary regimes with the approximate frequency at which the Big Guy changes his socks. It will be weaponized to punish enemies and achieve tactical political ends. If we get lucky, the issue will be fought out in the courts, which it almost certainly will. Like tariffs.
Won’t that be fun?
And, when this outfit gets run out of town, its successors will be worse.
The implications for disruption of the management of the Capital Economy are breathtaking to contemplate, and, under the circumstances, it’s small wonder that Beppie chose this moment to take her departure from the scene.
The carnage is, at present, difficult to see clearly. Equity Indices, while ginning up a modest sell-off in advance of Labor Day festivities, reside nonetheless at proximate all-time highs.
Our friends at the Atlanta Fed, goosed Q3 GDP estimates by a big slug just this past week:
This bump notwithstanding, though, futures markets regained their conviction about a September rate cut, again throwing off a probability of same to nearly 90%.
We will find out in a couple of weeks, and lord help us if they’re wrong. But they’re not. The cuts are coming.
But it’s important to remember, that by a wide margin, September is the worst-performing month on the investing calendar. I don’t say that 9/25 will necessarily contribute to this dismal tally, but it ought to be, at any rate, volatile. With virtually all roads leading to the next FOMC meeting on the 16th/17th. In addition to learning the next step in the Fed Funds Journey, it will be interesting to see how the Committee is constituted, or if, indeed, there’s any Committee left at all.
But now my coffee’s cold and I’m getting told, that I gotta get back to work. So, when the sun goes low and your home all alone, think of me and try not to laugh.
And spare a thought for Beppie. Now in the palm of the Good Lord’s hands.
And whatever else can be said about her, this much is true:
Wife, mother, grandmother, great grandmother, sister, aunt, friend, businesswoman or investor, she wore it well.
TIMSHEL