On the first of each month, I send a letter to our investors describing what we see in the world relative to their portfolios. We always try to identify some “big picture” issue, usually one that is overlooked. The goal is to have our clients understand our thought process.
One of my favorite analytical devices is to compare quantitative data with investor sentiment. Pitting the cognitive versus the quantitative often reveals a “perception gap” -- a difference between investors’ emotions versus the underlying market data. Think of it as “what people are thinking” versus reality.
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