| Dear Reader, The brilliant, energetic CEO and CIO of Morgan Creek Capital Mark Yusko kicked off events on the final morning of the SIC 2018 with his 10 surprises for 2018. Yusko, a self-proclaimed “speed-slider,” began by touching on why he believes interest rates are likely to stay low, and US stocks will have a very rough 2018. But he wasn’t bearish on all equity markets, saying that investors are massively underweight the fastest growing regions in the world—emerging markets. Yusko, who recently decided to make a massive investment in blockchain technology, gave attendees a masterclass on cryptocurrencies and the revolutionary technology behind them. John Burbank Next up was one of the most famous investors in the world, CEO of Passport Capital, John Burbank. John started off by saying, “Markets are not good at predicting things that have never happened before, and that’s where I like to invest.” With that, Burbank said the two places he is focusing on today is Saudi Arabia and cryptocurrencies. While Saudi Arabia is the world’s 14th largest economy and has a population of over 32 million people—foreign investors essentially have 0% of their portfolios allocated to the country. John then delved into the reasons why he and his team recently started a cryptocurrency hedge fund, and why he believes the new asset class will be the basis of a new financial system. Lacy Hunt After a short break, crowd favorite Lacy Hunt, who is the EVP at Hoisington Investment Management, took to the SIC stage. Lacy put on a masterclass for attendees around debt, monetary policy, and the economy and discussed why the recent tax cut won’t stimulate growth. Simply, it’s all down to the over-indebtedness of the US economy. For example, in 2007, a dollar in debt generated 37 cents in GDP growth. In 2017, a dollar in debt created only 31 cents in GDP. Lacy also had some strong warnings for investors over the Fed’s current tightening cycle. Investment Panel The final session at the SIC 2018 featured an all-star lineup of Mark Yusko, John Burbank, Lacy Hunt, Neil Howe, and John Mauldin John Mauldin began the session by asking the panel, “When do you see the next US recession occurring?” To that, Burbank and Howe said the probability of a downturn in the US happening before the 2020 election was “80–90%.” The panel went on to discuss the US economy, with Lacy Hunt mentioning that the foreign exchange markets are the most forward-looking market there is. As such, he believes weakness in the US dollar is a sign that investors are losing trust in the US. In closing, hedge fund manager John Burbank had some wise words for investors saying that with technology rapidly changing the world, they should expect not to understand what is going on in financial markets. Although the live action from the SIC 2018 has concluded, you can still get all the ideas, insights, and analysis shared by all 25+ speakers over the past three days with your Virtual Pass. Most of the video recordings from the first two days of action are now available for you to watch on the buyers-only website. You can also get instant access to the idea-packed slide presentations used by the speakers. I hope you have enjoyed these updates from the SIC 2018. It’s been my pleasure writing them for you. Sincerely, Ed D'Agostino
Publisher
| 