Yesterday we attended the Sohn Conference. The foundation was started in memory of Ira Sohn who passed away from cancer years ago. The organization has contributed over $65 million to cancer research. Many of the speakers are legendary hedge fund managers. They include the likes of David Einhorn, Jeffrey Gundlach, Stanley Druckenmiller and many more. It is considered one of the top investment conferences in the world.
Every year the conference brings together top ideas from general equity and fixed income views. They are smart, enthusiastic and more right than wrong. Every year they were excited, last year there was body language that was neither bullish or bearish. This year we noticed a big difference, they were negative. Gundlach was still espousing how the fed cannot afford to raise rates with lower GDP forecasts. Druckenmiller was downright bearish with his best pick being gold. Unlike last year, where complacency made us nervous, this year, they spooked us.
Granite Group still believes the stock markets to be overvalued in the short term. Will they be higher next year, we believe so, but not by much. Will interest rates be higher next year, yes, but not by much. So what to do? We are looking for a catalyst to take the market one way or another, but in the meantime, be patient. Wait for weakness in equity markets to add to positions and strength in yields before adding to bond positions.
As always please feel free to call us directly with questions.
