Dear Fellow Investors,
We’ve outlined the major topics & takeaways of our annual letter below – Click HERE to read the full annual letter.
MAIN MESSAGE HIGHLIGHTS:
- We just might not be thinking big enough, which is surprising given our optimistic Roaring 2.0’s and Intelligence Revolution calls.
- While bits-led advancement has been astonishing, real-world advancement has actually slowed.
- We believe we’re witnessing a paradigm shift in spirit and economics.
- We’ve been in a paradigm led by horizontal integration – seemingly slow by comparison. Believe we’re entering a paradigm led by vertical integration – an uncertain environment that moves fast.
- Bubble behavior is actually required.
- Difference between good and bad bubbles and their spillover effects.
- We’re about to experience something as transformational as what someone who lived through the Industrial Revolution experienced.
- We see the possibility of a future filled with freedom, abundance, and a modern-day renaissance.
FORECASTS FOR 2025:
- Economy: GDP up modestly, eclipsing $30 Trillion
- S&P 500: a breather year as earnings growth is offset by multiple compression
- Short-term rates: a methodical Fed marching towards neutral, 3.5% to 4% by year-end
- Long-term rates: 10-year yield maintains long-term average of 4.5%
- Oil prices: spends most of the year in the $65 to $70 per barrel range
- Inflation: in the range of 3.0% to 3.5%
- Commercial real estate: FTSE NAREIT All Equity total return index finishing up 7% to 9%
- Residential real estate: more subdued environment with gains up modestly, if at all
- “Fun” forecasts
- The cost of energy follows Moore’s Law as the thirst for power is met
- Long-term forecasts identifying trends that will command positive attention
- A working quantum computer will become reality, facilitating a jump to ASI
- Humanity breaks ground on a permanent moon-base
- Blake’s Tesla will earn money for him as he enrolls in their autonomous ride-hail service
- AGI will be recognized with the jump to ASI not too far behind
PLEASE NOTE, ALL QUOTED CITATIONS ARE FROM BOOM: BUBBLES AND THE END OF STAGNATION
Sincerely,
Blake Todd, CWS Jarrett Perez, CFA
Senior Vice President, Financial Advisor, Vice President, Financial Advisor,
Portfolio Manager Portfolio Manager
btodd@dadco.com jperez@dadco.com
Disclaimers
All quoted passages are from the book BOOM: Bubbles and the End of Stagnation
This Annual letter expresses the personal views of the author and Montecito Investment Portfolios on the current and future economic and investment landscape, at this date. It is subject to change and is not necessarily the opinion of D.A. Davidson & Co.
The information contained in this presentation has been taken from trade and statistical services and other source, which we believe to be reliable. We do not guarantee that this information is accurate or complete and it should not be relied upon as such.
This presentation is for informational and illustrative purposes only and is not intended to meet the objectives or suitability requirements of any specific individual or account. An investor should assess his/her own investment needs based on his/her own financial circumstances and investment objectives.
The forecast, projections, or other information generated by the author regarding the likelihood of various future outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.
Neither this presentation, nor any chart or graphs within this presentation may be used, in or of themselves, to constitute investment advice. They are for informational and educational purposes only.
There are risks inherent in any investment and there is no assurance that any money manager, asset class, style or index will provide positive performance over time. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Real estate investments may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Real estate investments may be subject to risks including but not limited to declines in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrower.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
The Standard & Poor’s 500 Index is a capitalization weighted index comprised of 500 widely-held stocks on US stock exchanges. Companies included in the index are selected by the S&P Index Committee, a team of analysts & economists at Standard & Poor’s.
S&P 500 Total Return Index is a measure of the price movement of The Standard & Poor’s 500 index and including the dividends paid by the companies in the index.
S&P Case Shiller Index – a group of indexes that tracks changes in home prices throughout the United States. Case-Shiller produces indexes representing certain metropolitan statistical areas as well as a national index.
GDP – the monetary value of all the finished goods & services produced within a country’s borders in a specific time period.
The MSCI US REIT Total Return Index is an index that broadly represents the price and income movement of the equity REIT universe in the United States. The Index represents approximately 85% of the US REIT universe.
The Barclay’s Aggregate Bond Index – includes government securities, mortgage-backed securities, asset-backed securities and corporate securities to simulate the universe of bonds in the market. The maturities of the bonds in the index are more than one year.
P/E Ratio is a valuation ratio of the company’s current share price compared to its per-share earnings.