Cullen Roche: Pragmatic Capitalism

Share the post "The Balance of Payments in the USA"Here’s a great new piece of research from the NY State Comptroller discussing the USA’s balance of payments. A lot of people don’t know it, but the USA is like 50 little countries all using the same currency. So we have trade imbalances that occur between the states. Those trade imbalances can’t be resolved by foreign exchange movements because we all use the same currency. So the perpetual current account deficit states have to be helped...

Share the post "You’re Doing it Wrong – Deficit Edition"If I showed you the chart below and asked you where you should buy stocks and where you should sell stocks the answer would be obvious, right? You buy low and you sell high. Everyone knows that. Of course, it’s easier said than done, but we still know the right answer. And the reason why this is the right answer is because your risk adjusted returns are likely to be better when you buy low than when you buy high. Again, that’s...

Share the post "Let’s Talk About Taxes and the Fed"At the risk of inflaming a sensitive political environment I am going to try to talk objectively about the economics of our political environment. I have my flame retardant suit on so let’s get started.Jerome Powell is the new Fed ChiefTrump’s appointment of Jerome Powell is kind of strange in my view. Powell is totally status quo. He doesn’t have many beliefs that veer too far from the Yellen Fed. I suspect that Trump didn’t want to be...

Share the post "Vegas Presentation – The State of the Markets"Here’s my talk in Vegas from earlier this month. It’s only 30 minutes but I think I covered a good bit of ground including:The passive investing craze.The importance of diversification in global asset allocation.Navigating high equity valuations.Why the aggregate bond index is imperfect.Why you should extend your duration in a bond portfolio.Why the Fed’s balance sheet reduction is overblown.This was a fun talk and I think people...

Cullen Roche, Founder of Orcam Financial Group, discusses the state of the global financial markets.

Cullen Roche, Founder of Orcam Financial Group, discusses the state of the global financial markets.

Cullen Roche founded Pragmatic Capitalism in 2008 to provide an alternative perspective to finance and economics. As an independent financial analyst and portfolio manager, Cullen brought some unique views to the way we perform financial and economic analysis. His exceptional understanding of the monetary system and financial markets has allowed him to provide contrarian and valuable insights in a world that is filled with opaque salesmanship.

Cullen Roche founded Pragmatic Capitalism in 2008 to provide an alternative perspective to finance and economics. As an independent financial analyst and portfolio manager, Cullen brought some unique views to the way we perform financial and economic analysis. His exceptional understanding of the monetary system and financial markets has allowed him to provide contrarian and valuable insights in a world that is filled with opaque salesmanship.

Share the post "Beware of Extremist Bond Calls"I’ve spent way too much of my career cautioning investors about extremist positions. No, there wasn’t a bond bubble in 2010. No, the stock market wasn’t a bubble back in 2013. No, the USA wasn’t going bankrupt in 2012. No, QE wasn’t going to cause hyperinflation. You get the point. I try to be objective and pragmatic and a big part of that involves empirically sound and operationally consistent analysis so we can make relatively high...

Share the post "Is a Taylor Tantrum on the Horizon?"Back in 2013 bond markets were jolted by the potential that the Fed would unwind its balance sheet more quickly than previously believed. The basic thinking was that QE puts downward pressure on interest rates so unwinding QE will put upward pressure on interest rates. That isn’t quite what happened, but markets are gonna market.Fast forward to 2017 and interest rates are only a bit higher than they were before the Taper Tantrum. I’ve been...