Michael’s CIO (Check-It-Out) Report on the week just past — events, sarcasm, and global macro reflections

November 21, 2022

THEME: Trendy

Investors seek a sustainable trend for their assets, but lack of trend seems to be the most graspable trend—Hence the benefit of having a reliable financial plan for keeping course

GL🌍BAL

Trends: According to Bloomberg, 4 trends will shape the world—energy cost differentials, rising Chinese wages, nearshoring supply chains, and remote work—and be positive for emerging countries with the right natural resources and institutions: Argentina, Colombia, Mexico, Malaysia, and the Philippines

China+: China seems to be loosening its zero-COVID strategy and has plans to rescue its massive property sector ➜ If this comes to fruition, it will be positive for the global economy—On the other hand, China also equipped its nuclear submarines with even longer-range missiles (JL-3 ICBMs)🚀 ➜ Any steps towards détente would also be a positive➕

April in Japan: This is not about tax day nor cherry blossoms, but next April, Bank of Japan governor Haruhiko Kuroda, will depart after a decade at the helm of a low interest rate policy that led Japan (and the world) towards easy money—Guess it will be up to the next central bank governor to deal with a weak currency💴 and inflation💹 in the world’s third largest economy ➜ This could lead to market instability

World Qup: Qatar spent $300 billion prepping for the World Cup, but beer will be in short supply as Qatari officials announced a last minute ban of alcoholic beer in and around World Cup stadiums🍺⚽🥅—“Well, this is awkward…” Budweiser, a major FIFA sponsor, wrote in a since-deleted tweet🤨

#1: Qatar is the first FIFA World Cup host country to lose their opening match, 0 to 2, to Ecuador—Well, this is awkward…😏

SPAC is back? Shares of Grindr more than doubled Friday after the dating app closed its merger with a blank-check company

Stayflation: Consumer inflation expectations have moved back up—holiday shopping and travel sticker shock maybe?🎄❄—Expect inflation to keep hanging around…

OilSlick: …but oil prices retreated as the US has a near-term oversupply and the global outlook is thorny

PermaMarks: Ultra-conservative bottom fisher investor Howard Marks of Oaktree Capital Group sees bargains coming as relatively high interest rates and economic fears push companies into “significant distress”—Something to look forward to😏—“This is going to be a buyer’s market and a lender’s market. We’re going to have much better opportunities,” he said ➜ Sounds like a favorable environment for investments in opportunistic private credit, private equity, hedge funds, and secondary funds💵

BIZNOMIC$

Holiday Sales and 23: Inflation is nearly everywhere except in stock prices and corporate valuations! ➜ Shopping season for mergers and acquisitions may continue well into 2023 as banks, energy companies, large tech firms, and private equity funds remain flush with cash

COLORado: Following Oregon, Colorado became the second state to legalize the supervised administration of psilocybin and psilocin (mushrooms), mescaline, ibogaine, and DMT for health and mental health issues🍄—Note: There are some high risk venture funds targeting this area

Mickey’s Kingdom: 71 years old Bob Iger is back in charge of Disney after the Board ousted CEO Bob Chapek 🐭🏰

wHEALTH

LA Mansion: Los Angeles city voters passed the mansion tax, an additional 4% transfer tax on residential and commercial property sales worth more than $5MM and a 5.5% tax on +$10MM—This is in addition to the current 0.56% combined city and county transfer tax—This makes surrounding cities and counties look even more affordable! The tax applies after March 31, 2023—Contact our inhouse tax and estate professionals with questions

CONTENT

TaylorNation: Live Nation Entertainment is in a “lavender haze”, no one’s hero nor “anti-hero”, but a villain “maroon”ed with bad “karma”, a major “question…?” in a “labyrinth” of bitter-“sweet nothing” and without a “mastermind” “midnight” redemption plan as “vigilante shut”-out😉 fans and even the U.S. Department of Justice question the fiasco of the “eras” with #Ticketmaster’s multiple site crashes, siege by bots, mammoth wait times, and millions of #TaylorSwift fans frustrated or unable to buy tickets for her first tour in five years—3.5 billion online requests for 2 million tickets sold!—Ticketmaster now claims a lack of ticket inventory, but this is not a normal #supplychain problem🙊🎫🎟—There may be “snow on the beach” by the time this is solved😏

Ragnarök: The video game, God of War Ragnarök (by Santa Monica Studio) has received rave reviews across the board and surely will be a part of many Thanksgiving and holiday plans—Fav quote, “In moments of crisis, panic does nothing. Harness it, let it serve you”

PERSONAL

LongLA Holiday Party: I attended this event last year (at a different location) and found it surprisingly worthwhile for talking to startups and entrepreneurs as well as general holiday fun. Will be there again this year, Thursday, December 15—https://www.ticketfairy.com/r/18482/1255798—Maybe you’d be interested too?

Times: Quoted by International Business Times regarding how inflation and recession fears will affect the holiday season—Shoppers may view this as their last spending spree before the economy possibly heads south and credit disappears! “The main constraint on sales will continue to be from the supply side, not the demand side; big-ticket and semiconductor-intensive items like automobiles, electric vehicles, electronic gadgets, and snowmobiles may be hard to source.”

Reuters: Quoted by Reuters regarding PayPal’s reduced revenue growth forecast in anticipation of an economic downturn—“Their cost saving plans are taking hold but in the ultra-competitive payments world, market share gains don’t seem to be enough to placate investors,” especially since they are no longer the new kid on the block

Make it a great Thanksgiving week😊
Michael
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Michael Ashley Schulman, CFA
Partner & Chief Investment Officer
Running Point Capital Advisors, your family office

“We deliver custom investment solutions, innovations, and unique perspectives to you and your family.”

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Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-22-66