Let’s start with a few historical observations: Equity markets have gone up 80% of the time when viewed on a 6-month rolling period. They have experienced 10% or greater declines over a 6-month period approximately 10% of the time. Of the worst downturns over the past 60 years, the market has recovered to its past...Read More

“It is more sekyr [certain] a byrd in your fest, Than to haue three in the sky a‐boue.” – John Capgrave’s The Life of St Katharine of Alexandria, 1450 The last four months have seen investors move from a futurity (new word for us) approach to a more here-and-now approach. The prices of companies focused on...Read More

“So I just don’t think a lot of people have seen this. When’s the last time anyone here has seen interest rates up 2 years in a row and 6 or 7 times this year and 4 or 5 next? Nobody has seen that. Nobody has seen a lot of a lot of things that...Read More

Two thoughts from Oliver Burkeman (h/t @jposhaughnessey) “True security lies in the unrestrained embrace of insecurity—in the recognition that we never really stand on solid ground, and never can.” “Uncertainty is where things happen.” Over the past two long-drawn-out years, we have discussed the idea that market participants swing between uncertainty and complacency. We have...Read More

The world’s addiction to low interest rates reminds us of the Sirens of Greek mythology who allegedly (never convicted) inhabited an island between Aeaea (and you thought Auour had a lot of vowels) and the rocks of Scylla. Their sweet songs (low interest rates) attracted sailors (borrowers), only to lead them and their ships to...Read More

In our May 2021 newsletter, Breaking Windows, we discussed inflation and its impact on the investment markets. We said the primary drivers of inflation were the large stimuli injected unevenly into the global economic system through governments and central banks. That newsletter focused on one side of the equation—demand—and in it we noted: “There is...Read More

We recently watched a TED talk by fiction author John Green. He opened his talk by discussing Agloe, a made-up town in New York that he used in his book Paper Towns. Agloe was created by the cartographers who made Esso maps in the 1930s as a means of detecting future plagiarism. If Agloe found...Read More

We are keeping with our summer series of more charts and fewer words. Most of this newsletter will be discussing interest rates, inflation and why many fear the eventual monetary stimulus unwind. The chart above attempts to rebuild a history of U.S. interest rates over the span of the country’s independence. Two items stick out...Read More

Insouciance If you follow us on LinkedIn, you will notice our desire to improve our vocabulary through the launch of the Auour Word of the Day (AWOTD). Within this note, you will see demonstrations of our fresh learnings. As with our last note, however, we are going to keep text to a minimum and not...Read More

Summer has officially begun. Humidity is rising on the East Coast. The Pacific Northwest is hitting temps we have never seen before. Sunburns are fading into tans. With summer hitting its stride, then, we will keep this note short… We love what Mark Twain said about speculation: “There are two times in a man’s life...Read More