Eric Clark, Portfolio Manager

By now, you have likely seen and heard the news about FTX’s epic collapse & bankruptcy filing last week. Over the last year, lots of smaller cryptocurrency platforms have gone under and the hacking of customer digital wallets has been rampant.

In my 30 years of investing and tracking consumer trends, I have never witnessed a more complex set of variables to assess consumer health and future spending trends. Covid, and the responses to it, have created a 100-year storm across many facets of the global economy.

In my 30 years of investing and tracking consumer trends, I have never witnessed a more complex set of variables to assess consumer health and future spending trends. Covid, and the responses to it, have created a 100-year storm across many facets of the global economy.

A key mega trend our team is excited about is the migration of assets to alternative asset managers. Within the asset management industry, the alternatives category is growing fast and with significant room to expand. The "smart money," which includes foundations, endowments, pensions, sovereign wealth funds, and insurance companies, have been investing in private markets for decades and between 20-40% of their total portfolios are still invested in this category today. The high-net-worth and private wealth markets have been much slower to adopt the private markets, but meaningful asset growth has begun while still being only roughly 2-4% of a typical HNW portfolio. Although they should, I do not expect the retail market to begin allocating like the smartest institutions. However, from where we sit today, there is still meaningful growth ahead in this channel. A recent Evercore ISI report shows each incremental 1% allocation from the wealth management platforms would mean $100 billion of additional assets to alternative managers. That's powerful stuff.

There are a handful of investors that have risen above everyone else over time. Peter Lynch was one of the titans of investing. Peter ran the Fidelity Magellan Fund from May 1977 to April 1990. Over that period, the Magellan Fund was the top performing equity fund. His “invest in what you know” approach is quite similar to what we preach with the top global brands approach to investing.

Absolutely no one knows what will happen in the future. When you come across a person or firm that says they can predict the future, ask yourself why they aren't sitting on a 100-foot yacht in St. Barts versus talking to the media or you about their knowledge of the future.

Absolutely no one knows what will happen in the future. When you come across a person or firm that says they can predict the future, ask yourself why they aren't sitting on a 100-foot yacht in St. Barts versus talking to the media or you about their knowledge of the future.

We have all heard the adage, “the stock market is a discounting mechanism”. Stocks tell a story of the future long before the facts confirm it. Most growth stocks peaked in late 2021 and have experienced significant drawdowns ever since.