3Q 2018 Market Observation Newsletter

We are pleased to provide you with our 3Q 2018 Market Observation, which shares relevant articles about the current market environment. We hope you enjoy this quarter's edition. As always, if you have questions regarding your account or your financial planning needs, please contact us.

The Most Important Lease-Noticed Economic Event of the Decade

Nearly a decade has passed since the financial crisis. Statistically, the U.S. has now experienced uninterrupted economic growth dating back to early 2009. While the country as a whole has experienced broad economic expansion, this expansion has not been felt evenly in all areas of the country. This New York Times article looks at the “mini-recession” of 2016 that occurred as Fed policy diverged from the global economy. The localized slowdown impacted many manufacturing communities and weighed heavily on agriculture and energy businesses. Isolating the causes and impacts of the slowdown helps to explain many events of the past few years, including political discontent, stock market returns, currency movements, oil prices, and the slowdown and subsequent uptick in business investments. Further, we can draw lessons from the past few years regarding the interconnectedness of the global economy and about how individual policy decisions can reverberate throughout the world. Read more

An interview with IVA’s Charles de Vaulx: “How to Stay Rich”

Barron’s recently interviewed Charles de Vaulx, the co-founder of International Value Advisors and portfolio manager of the IVA Worldwide Fund. In this interview, Charles shares his thoughts on the market, the economy, interest rates and the dollar. Further, Charles goes on to discuss how he has his fund positioned today. As the bull market has continued to run, valuations or the prices of investments have steadily increased, and in response, IVA has reduced their exposure to risky assets. Charles explains how this approach is in line with the fund’s objective of generating long-term growth while also seeking to preserve the capital of its shareholders, telling Barron’s, “Our clients understand that if you’re rich, you only need to remain rich...At times we will be in risky assets...But the risk/reward has to be tilted in our favor, and what makes that happen is valuation.” Read more.

How Atul Gawande landed perhaps the most extraordinary (or impossible) job in health care

Earlier this year, Amazon’s Jeff Bezos, JPMorgan Chase’s Jamie Dimon and Berkshire Hathaway’s Warren Buffett teamed up with a goal of collaborating to disrupt and improve America’s health care system. Rather than tapping another executive to lead this venture, the three CEOs selected Atul Gawande, a 52-year old surgeon, journalist and author. Gawande’s public stature grew following a 2009 New Yorker essay that examined the vast discrepancies in the cost of health care in different areas of the United States, and his book, The Checklist Manifesto, released that same year, which examined the substantial impact that systems, organization and pre-planning can have on outcomes (both in and outside of the world of health care). This article digs deeper into the impact that Gawande has had in the field of health care, and at what the Amazon-JPMorgan Chase-Berkshire Hathaway health venture aims to accomplish.” Read more