I Don't Usually Do This. But This Time Is Different

I almost didn’t write this.

Not because I don’t have a view. I always have a view. But because I’ve spent three years building a newsletter around timeless principles portfolio architecture, asset selection, the mechanics of wealth that work in any decade. Tactical calls have never been my thing. I leave that to the traders.

But there are moments when silence is its own kind of mistake.

This is one of them.

So before I get into what I think happens between now and July, let me give you the context that earns me the right to say it.

In June 2021, when Powell was on every screen telling the world that inflation was transitory, I wrote the opposite. In issue after issue that summer, I said the Fed’s monetary expansion was unsustainable, that printing money without creating wealth had a price, and that the CPI spike coming would be unlike anything we’d seen in forty years. Nobody wanted to hear it. The party was too good.

Two years later, that same Fed had raised rates eleven times. Inflation hit 9.1%. Portfolios built on the assumption that “the Fed has your back” lost 20, 30, 40%.

I also told you in late 2021 that the indices were masking what was happening underneath. That a handful of companies were holding up the S&P while the rest of the market was already correcting. That we were in the final sprint of the cycle, and that the final sprint is always the most dangerous place to be running.

The Nasdaq fell 33% in 2022.

I’m not saying this to impress you. I’m saying it because the pattern I’m seeing right now rhymes with those moments. Not identically. But close enough that I can’t stay quiet.

Here is what I think happens before July.