Repricing the World

Nothing Like Normal
Math Problem
A Few Thoughts on Unemployment
Repricing the World
Staying at Home

The viral fog is starting to thin. US coronavirus case growth appears to be slowing, albeit at a tragically high level. Governments and businesses are thinking about the next stage.

On the other hand, fog tends to return when the weather is right. Might this virus come back, as seems to be happening in Japan and Singapore? We shouldn’t relax just yet.

Nate Silver’s FiveThirtyEight site published an information-filled comic about the wide gaps in various “scientific” virus models. Just as in investing and climate change, accurate models are difficult. Just a sample:

Source: FiveThirtyEight

We know everything has changed, but we don’t yet know how. This all happened within weeks instead of unfolding over years like other major crises. We haven’t had time to process it all, much less prepare for it. There’s nothing like a Bretton Woods plan for the next phase. We’re making it up as we go along. So are our leaders. And they are often relying on models everyone knows are flawed, but they have to start somewhere.

My friend Mark Grant summed it up nicely in his letter this week.

We are peering into the void, of the great unknown, and trying to make sense of an array of data that doesn’t fit any economic models, because we have never been here before, and we don’t know how to model for economic conditions that have never existed before, in anyone’s lifetime.

I will readily admit that I use models all the time. I try to understand their limitations. Most business people use models to plan out any new venture or predict the next year or so. The successful ones use a mathematically imprecise tool called “the fudge factor.” They assume that something will go wrong and try to allow for problems. If there is no problem, then they have “excess profits.” But if there is one, they are ready.

I believe we will look back at some of these models and say they were too conservative. But that is in hindsight. What if they weren’t? Unlike a business, it wouldn’t be just a dollar loss, but lost lives. They did the responsible thing and built in a significant fudge factor because the data was all over the place.

All that said, investors and business leaders still need some kind of outlook to guide our strategy going forward. Of course it will be tentative, but we can adjust as we gain clarity. The important part is to not let the uncertainty paralyze us.

Developing our own individual strategy going forward, not being paralyzed, is indeed the primary focus for the first-ever Virtual Strategic Investment Conference. Here’s my official announcement message.

I was disappointed to have to cancel this year’s SIC in Scottsdale. It was clearly going to be the best ever. But as I and my team thought about it, there has never been a more important time for a virtual conference. After a few phone calls, I realized that I could put together an even more powerful gathering of the best minds and thought leaders in the world.

We will present a live virtual conference for five days between May 11–21. Our technology will let you ask questions just as if you were physically there. I have restructured the agenda to focus on what the economy will look like over the next six months and in a post-vaccine world. We know that it will be different. You’ll hear from thought leaders who can separate the signal from the noise, showing you what’s important and where the opportunities are, and of course what to avoid.

I honestly believe this will be the most important SIC I have ever hosted. There has never been a more urgent time as confusion reigns and the need for clarity is paramount.

This conference will not be about hunkering down, but finding opportunities and moving forward. The Age of Transformation is going to accelerate. We will cover every nook and cranny of the investing, geopolitical, and political landscape.

And what a lineup of speakers! Here are just a few of the almost 30 already confirmed:

  • Celebrated investor Leon Cooperman
  • Ian Bremmer and George Friedman on geopolitics
  • Michael Pettis coming to us live from Beijing
  • Felix Zulauf live from Switzerland
  • The entire Gavekal team, Louis and Charles Gave plus Anatole Kaletsky
  • Dr. Mike Roizen hosting some of the finest epidemiologists in the world
  • Barry Ritholtz and China expert Jonathan Ward
  • Political mavens Bruce Bartlett and Bruce Mehlman.

Of course we will have David Rosenberg, Lacy Hunt, and this year Ben Hunt, along with Jim Bianco to give us insights on Federal Reserve policy and bonds. There will be a special focus on technology as my good friend Peter Diamandis has agreed to join us from Silicon Valley along with Karen Harris of Bain and technology wizard Cathie Wood.

There are too many to mention but it will be the biggest collection of forward-thinking brainpower gathered anywhere this year.

The price is less than 10% of the live event, let alone travel and hotel. You will be able to watch the conference from the comfort of your home or office, either live or reviewed at your leisure, plus read the transcripts. Ask your questions.

Again, don’t procrastinate. Click here and register now.