Cullen Roche: Pragmatic Capitalism

Our guest this week was Cullen Roche, CIO of Disciplined Funds, founder of Orcam Financial Group and author of Pragmatic Capitalism: What Every Investor Needs to Know About Money and Finance. We discussed topics that included: - Disciplined Funds’ macro-oriented investment approach - Cullen’s rude awakening – classic economics learned in university is largely at odds with real world economics - Taking a step back and learning public finances from first principles - Digging...

All I am thinking about is inflation these days. That’s it. 1) How about that CPI report? This morning’s CPI came in at 7.5%, hotter than expected. Not really that surprising. As I’ve been saying, we’re going to see a bunch of these high readings into the Summer. The statistical “topping effect” I’ve been talking about won’t start to really kick in until around June and then it should put a pretty likely top on the year over year data. If some prices fall (commodities and car prices) then...

Here’s a NY Times piece calling for a MMT “victory lap”, with an asterisk. It’s an interesting article, but the asterisk seems to be doing an awful lot of heavy lifting here. The basic gist of the article is that the government spent a lot of money and the government didn’t go broke. And sure, on the one hand, the economy is robust. On the other hand, inflation is worrisomely high. Depending on how you pick your narrative you can frame this as either very good or very bad. But does MMT...

Fan favorite Mr. Cullen Roche brings the best contrarian view points and when you dig into them, you realize they are rooted in first principles thinking. IN THIS EPISODE, YOU’LL LEARN: 0:00:00 - Intro 0:00:57 - Ramifications of the most recent FOMC meeting (which was happening while we were recording) 0:02:44 - Why Cullen thinks inflation has peaked and the risk of recession is low 0:14:43 - On Jeremy Grantham’s “Superbubble” Warning 0:20:39 - Why bonds are still...

Fan favorite Mr. Cullen Roche brings the best contrarian view points and when you dig into them, you realize they are rooted in first principles thinking. IN THIS EPISODE, YOU’LL LEARN: 0:00:00 - Intro 0:00:57 - Ramifications of the most recent FOMC meeting (which was happening while we were recording) 0:02:44 - Why Cullen thinks inflation has peaked and the risk of recession is low 0:14:43 - On Jeremy Grantham’s “Superbubble” Warning 0:20:39 - Why bonds are still...

I have to put on my flame retardant suit for this one because the Bitcoin community is not going to like this. Here goes nothing. Most definitions of money say that money has to have three properties – unit of account, medium of exchange (MOE) and store of value (SOV). I think this definition is contradictory and the evidence of all financial assets through history bears this out. Stay with me for a few minutes. Money always has to be defined in a unit of account. That could be Bitcoin,...

The Nasdaq is down 14%. The S&P 500 is down 9%. Even the gold standard of portfolios, the 60/40 is down 7%. They’re not catastrophic numbers, but they’re fairly sizable given that we’re only 27 days into the year. At this rate the Nasdaq will be at $0 by July. Just kidding. That’s not how that works. But still, it’s an uncomfortable environment. So what should we do? Here’s a quick check list: 1. Revisit your financial plan and goals. A lot of people will overreact during market...

Here are some things I think I am thinking about: 1) Grantham calls for a market crash.  Here’s a provocative piece from Jeremy Grantham saying we’re in the 4th “superbubble” of the last century. I won’t ruin the uplifting read for you, but I will just say this – I don’t love making these sorts of huge extremist calls because this sort of emotionally charged rhetoric tends to lead people to make extreme portfolio moves. If you think a crash is around the corner then you move to 100% cash....

Hope your long weekend is going well. Here are some things I think I am thinking about: 1) Has inflation finally peaked?  I am ready to call it. Inflation has peaked or will peak in the coming few quarters. I’ve discussed the broader picture in the past (see this big piece for details), but the biggie here is an increasingly impactful statistical topping effect that is going to start putting downward pressure on the data in the coming quarters. Used cars are a great example of what’s been...

The popular blogger and financial advisor discusses the macro outlook, the link between portfolio construction and investor behavior, his new ETF, and more.