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Congrats team!

I’ve wanted to go for the past few years and will be going this year to see Warren and hopefully Charlie.

Will anyone else be in Omaha the last weekend of the month?

$BRK.A $BRK.B

Lots of rumors floating around, lets see what we think

The Personal Consumption Expenditures (PCE) is the Feds preferred inflation measure.

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PCE increased 6.4% yoy

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This was pre Ukraine invasion so expect a higher read in following months

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An interesting debate:

El-Erian argues prices will keep rising while Rosenberg argues inflation will die down.

Federal Reserve PCE estimates:

The Fed is going to raise rates, this is old news. Everyone thinks that this will shrink multiples and be bad for long duration risk assets because you are discounting by a higher rate.

But consider this:

It seems clear that the Fed will exercise caution and even at the fastest only move rates to about 2.5% a year from now. Compare this expected increase in nominal interest rates with the change in inflation. If inflation goes from the current 7.9% to 10.4% then the real change in interest rates is 0.

Aside from the Fed, most government policy is geared to err to the effect of increasing inflation over decreasing growth or increasing unemployment. It is too politically difficult today to promote policies otherwise.

If you take this all together I think there is a good chance that real rates stay around the same or even go lower from here. And this would be good for long-duration risk assets if you think that the real rates impact the multiples more than the nominal rates.

So load up on $TSLA , $GME and $BTC.X calls

With the potential for political chaos leading up to and after the election, a possible resurgence of coronavirus in the fall, slowing hiring growth, stimulus uncertainty, and a wave of corporate defaults on the horizon I paused this week and reflected.

"What could go right?" and "What could go wrong?"

"What would the upside be?" and "What would the downside be?"

"What are the odds of a positive upcoming quarter?" and "What are the odds of a negative upcoming quarter?"

And I decided that cash is where I want to be to take advantage of potential large swings ahead. I am okay missing out on a big move up to protect myself from the downside given what I see as the risk/reward in equities and anything liquidity correlated (equities/precious metals/commodities/bitcoin). The S&P is only down about a percent since the pre-crisis high in Feb. I want to protect my capital from a liquidity driven sell off.