The LongWave Model update May 1 2023

Have we entered into Economic Winter?

1. For many investors, capital preservation in real terms should be more important than capital growth in notional ones.

2. Investors – as humans – are typically loss-averse. We feel the emotional impact of equivalent gains and losses disproportionately. This does not mean we should avoid considered risks but invest dispassionately.

3. Investing dispassionately is difficult when most investment media comprise the participants in a 24/7 circus. If the business of investing is either entertaining or exciting, you’re doing it wrong.

4. The answer is obvious: turn off the TV

5. True TAA remains the last free lunch in finance.

6. Having fatally tainted monetary policy, the dismal science of economics has wrought damage across investment theory as well: ‘homo economics does not exist, and markets will never be wholly efficient until all people are, too.

7. “The investor’s chief problem – and even his worst enemy – is likely to be himself.” (Benjamin Graham)

8. The general principles of investing could be more precise. They should begin with the avoidance of loss.

9. Starting valuation is the essential characteristic of any investment.

10. The importance of where we are in the in the Longwave, Kuznets’s (Real Estate) and Business Cycle will ultimately determine the Tactical Asset allocation model.