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Circle of Competence Issue #103


"Just keep in mind: the more we value things outside our control, the less control we have." - Epictetus


Macroeconomic Data Dashboard

I've added a new dashboard to my website to track macroeconomic variables from the St. Louis Federal Reserve public website. Please reach out if you have any additional macro variables that are worth including.

A couple things pop out:

- The "CCC rated and below" credit spreads are beginning to blow out like they did in late 2015/2016, but still have a ways to go until they reach 2008 highs.

- The yield curve has reversed its previous inversion, reflecting credit spreads begininng to increase, indicating stress in the credit markets.

- This is especially true in the high yield and riskier parts of the market which support highly levered, weaker businesses. This could be the first part of a multiseries credit contraction that has been sparked by the COVID-19 outbreak and lockdowns in place at the moment.

Lock Arms

While I will continue to post links on investment memos, investment opinions, and new developments in the markets, I want to send my prayers out for those who are being severely impacted by this outbreak and the accompanied economic/social lockdowns that have resulted. While for some, this outbreak represents a massive investment opportunity, for many more, this is an economic shock to their business, their job, and their family. Please keep them in mind: