Dusted off an anecdote from 2024 about the best career advice one of my closest friends ever received (see below). I take late summer off from writing. Making more space for family, reading, wandering. Wishing the same for you. All the very best, Eric
Week-in-Review: Mon: Trump extends China tariff another 90 days. Trump names EJ Antoni to lead Bureau of Labor Statistics, succeeding McEntarfer. Mexico IP -0.4% (0.2%e). S&P -0.3%. Tue: U.S. CPI 2.7% (2.8%e), core 3.1% (3.0%e). India CPI 1.55% (1.40%e). Japan PPI 2.6% (2.5%e). Australia cash rate target 3.6% as exp. China urged local companies to avoid using Nvidia’s H20 chips, complicating Trump’s AI chip deal. S&P +1.1%. Wed: Germany CPI 2.0% as exp. Poland GDP 3.4% as exp. Russia GDP 1.1% (1.5%e). China M2 8.8% (8.3%e). US Treasuries rallied, with interest rates swaps fully pricing in a quarter-point cut next month. S&P +0.3%. Thu: US jobless claims 224k (225k e), cont claims 1953k (1967k e). UK GDP 1.2% (1.0%e), IP 0.2% (-0.2%e) / mfg prod 0.0% (-0.8%e). Norway key deposit rate 4.25% as exp. Trump administration is considering taking a stake in Intel Corp. S&P flat. Fri: UMich sentiment 58.6 (62.0e). HK GDP 3.1% as exp. Taiwan GDP 8.01% (8.00%e). Israel CPI 3.1% as exp. Trump meets with Putin in Alaska, calling the meeting “extremely productive”; Trump will be speaking with Zelensky to make a deal. Trump also says semiconductor tariffs will be set in the next two weeks that could reach 300%. S&P -0.3%.
Weekly Close: S&P 500 +0.9% and VIX -0.06 at +15.09. Nikkei +3.7%, Shanghai +1.7%, Euro Stoxx +1.2%, Bovespa +0.3%, MSCI World +1.2%, MSCI Emerging +1.5%, Bitcoin +0.5%, and Ethereum +8.7%. USD rose +1.0% vs Mexico, +0.4% vs Canada, +0.4% vs Turkey, +0.2% vs Australia, +0.2% vs Russia, +0.1% vs China, and flat vs Chile. USD fell -0.9% vs South Africa, -0.8% vs Indonesia, -0.8% vs Sterling, -0.6% vs Brazil, -0.5% vs Euro, -0.4% vs Yen, -0.2% vs Sweden, and -0.1% vs India. Gold -3.1%, Silver -1.5%, Oil -1.7%, Copper +0.6%, Iron Ore -3.4%, Corn -0.1%. 10yr Inflation Breakevens (EU flat at 1.75%, US -1bp at 2.38%, JP +2bps at 1.49%, and UK -4bps at 3.00%). 2yr Notes -1bp at 3.75% and 10yr Notes +4bps at 4.32%.
2025 Year-to-Date Equity Index Returns: Greece +62.6% priced in US dollars (+44.7% priced in euros), Hungary +55.5% priced in US dollars (+32.5% priced in forint), Poland +54.3% in dollars (+37.4% in zloty), Czech Republic +52.9% (+31.9%), Spain +49% (+31.8%), Austria +49% (+32.3%), Colombia +47.5% (+34.6%), Korea +42.4% (+34.4%), Italy +39.7% (+24.8%), Portugal +38.6% (+22.6%), Germany +37.8% (+22.4%), Ireland +36.6% (+20.8%), South Africa +34.6% (+25.4%), Israel +34.3% (+24.9%), Chile +34% (+30.2%), Mexico +31.1% (+17.8%), Norway +30.4% (+16.7%), Brazil +29.7% (+13.3%), Finland +28.8% (+14.4%), Belgium +26.6% (+12%), Euro Stoxx 50 +25.9% (+11.3%), HK +25.1% (+26%), Vietnam +24.8% (+28.7%), Sweden +22.8% (+6.3%), UK +21.6% (+11.8%), France +21.4% (+7.4%), Singapore +19% (+11.7%), Canada +17.6% (+12.9%), Switzerland +16.8% (+4.1%), Japan +16.1% (+8.7%), Taiwan +15.5% (+5.6%), Australia +15.3% (+9.6%), Netherlands +15.3% (+2%), MSCI World +12.6% in dollars, China +12% (+10.3%), NASDAQ +12%, Indonesia +11.6% (+11.6%), S&P 500 +9.7%, UAE +8.5% (+8.5%), New Zealand +4.2% (-1.7%), Russell +2.5%, Malaysia +1.9% (-4%), India +1.7% (+4.2%), Philippines -1.8% (-3.3%), Turkey -4.3% (+10.6%), Thailand -5.2% (-10.1%), Saudi Arabia -9.9% (-10%), Denmark -19.2% (-28.2%), Argentina -31.1% (-13.6%), Venezuela -99.8%.
Anecdote (Jun 2024): “The best career advice I ever got was from Richard Rainwater,” said the investor, a business builder, iconoclast. “He told me to find where capital needs to go and then make sure to become relevant in that space,” he said. “It’s the only advice I’ve been consistently attached to throughout my career. I’ve been dogmatic about it.” We go back 15-years, and he’d never told me this story, although I’d marveled at its impact. His early move into developing AI data centers was the latest example of his style, opportunistic in the extreme. “Not everyone is comfortable with me shifting from one sector to another. They’re attached to theories about domain expertise,” he said. “I find those arguments to be cynicism dressed as skepticism.” Skepticism is basically smart, cynicism is stupid. “Everyone wants to be a skeptic and most skeptics are just cynics,” he said. “I’m a serial denier of the value of expertise. I’m almost maniacal about it to the point where I often see it as a net detriment,” he said, having built his fortune across seemingly disconnected industries, investment strategies, asset classes, continents. “One of the greatest problems with the world generically and humans specifically is our arrogance,” he said. “Experts rarely return to first principles; they don’t go back with a fresh set of eyes and a new perspective when encountering problems.” Highly competent people approach a new challenge with a measure of paranoia, a fear of not knowing, and from this comes a powerful open-mindedness. “Experts usually don’t have humility; they have arrogance disguised as confidence,” he said. “We think we’re one thing but we’re really something else, as individuals and as a group. We spend all our time trying to make ourselves comfortable and almost no time trying to make ourselves uncomfortable.” This is how we’ve been wired. “But this is deeply deleterious to excellence in everything and anything we attempt. So, we must run counter to our own wiring and logic to achieve great success.”
Good luck out there,
Eric Peters
Chief Investment Officer
One River Asset Management
Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.