Santangel's Review

Commentary

Move Over Howard Marks

Howard Marks’ memos have become a must read on Wall Street and rightfully so. However, we think Tom Barrack of Colony Capital also provides some incredibly insightful articles. In his latest memo, which came out on June 8th, he lays out (in bullet point format) where he thinks we are in the cycle, everything he is worried about, and how he is positioning Colony Capital. He has a real estate focus, but the insights are applicable to the equity markets as well.

He concludes with this sobering analysis:

 

“It feels to us like a different strain of the
“Stagflation” of the 1970s. Stagflation is an
economic situation where the growth rate slows
down, unemployment levels remain steadily high
and inflation also stays high. We should all take a
look back at the OPEC oil embargo of 1973,
government spending of the 1970s, and the effect
of a fall of consumer confidence that ensued.
Maybe, we will not incur a “double dip” but
caution should be foremost and complexity and
risk should be correctly priced and calibrated”