“Poverty is the parent of revolution and crime.” — Aristotle   We tried to write about markets today. We could not. This was meant to be for subscribers only but we are putting it out there. The great Libyan anti-colonial liberation fighter Omar Mukhtar (1858 — 1931), also known as the Lion of the Desert, protected two Italian prisoners his custody saying, “We do not kill prisoners.” In response to this, a fellow warrior protested and said, “They do it to us!” The Lion of the Desert responded, “They are not our teachers.” As images of the cold-blooded murder of Greg Floyd, wide spr ..read more

  “Like Hitler, like Stalin, the énarque believes that power will always prevail over economics.” ― Bernard Connolly, The Rotten Heart of Europe: Dirty War for Europe’s Money “Everybody aspires to an affordable home, a secure job, better living standards, reliable healthcare and a decent pension. My generation took those things for granted, and so should future generations.” ― Jeremy Corbyn   Señor Mario Draghi pledged in 2012 to do “whatever it takes” to save Europe from the sovereign debt crisis that engulfed many members of the European Union. Those momentous words took the eurozone out of ..read more

  Investment Case   Vertex Pharmaceuticals is the only pharma company with the necessary regulatory approvals to market medicines for the treatment of cystic fibrosis, i.e. a sub-category monopoly.   Four approved medicines — TRIKAFTA SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO — with list prices ranging from $272,000 to $311,000 per annum   Across the US, Europe, Canada and Australia there are an estimated 75,000 patients with CF   Vertex’s medicines are presently being used to treat 60% of these patients; in the US, 90% of all CF patients are eligible for at least 1 out of Vertex’s 4 CF treatmen ..read more

Contents Thoughts and Investment Ideas for 2020 Ideas Summary Energy The Speculative Phase: Software Over Semiconductors Playing the Strength in US Housing Demand Founder Exodus: A Reduction in Existential Flexibility USD Thoughts Summary Macro Risks Inflation is the Enemy Valuations US Treasury Yield Curve Modern Monetary Theory Books Five We Have Read and Recommend Five from Our 2020 Reading List   Thoughts and Investment Ideas for 2020   “Can you ask a new question? It’s the new questions that produce huge advances…”  ― Why Model? by Joshua M. Epstein   “A reward-sensitive person is high ..read more

“Trying to change before you’re ready isn’t likely to be productive. For example, most New Year’s resolutions don’t last because people spring into action without being prepared for the work it’s going to take. Forcing change based on a date on the calendar, rather than a true readiness to transform, can be a setup for failure.” ― Amy Morin “Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again. I’ve never forgotten that. I su ..read more

  Request a free 30-day trial to our weekly market commentary and trade alerts service by emailing us at info@lxvresearch.com. No credit card needed. No spam.     The post Request a Free Trial appeared first on LXV Research | Independent Investment Research ..read more

  A somewhat lengthy piece discussing some of the psychological hindrances all of us face from time-to-time in investing and trading pursuits. We share one chart right at the end of the piece with little comment, which is the basis of our expectation that the US equity market is to see new highs still. The Science of Tribalism  “Everybody wants to protect their own tribe, whether they are right or wrong.” ― Charles Barkley While watching television, have you ever looked away or squealed in response to a gruesome scene, the kind that became a regular occurrence on HBO’s Game of Thrones?  Turns ..read more

  “We can chart our future clearly and wisely only when we know the path which has led to the present.” ― Adlai Stevenson I, 23rd Vice President of the United States of America A short piece with three macro charts and limited commentary. 1. Global Risk Data validating recessionary fears have been the flavour du jour recently. The below is a chart of the MSCI All Cap World Index and the twelve-month moving average of the Citi Macro Risk Index, which suggests that a cyclical upturn in global equities is probable. It is not the magnitude rather the direction of the risk index that acts as a cycl ..read more

  “But, as with markets, in the ocean the interesting things happen not at the equilibrium sea level which is seldom realized, they happen on the surface where ever-present disturbances cause further disturbances. That, after all, is where the boats are.” ― W. Brian Arthur   Financial markets exhibit a temporal phenomenon known as clustered volatility. That is, the existence of periods of low volatility followed by periods of high volatility. Low volatility reigns supreme when the the outcome of the cumulative actions of market participants mutually benefits the majority. And, by extension ..read more

  A chart heavy piece this week in which we dig into the underlying shifts in the capital flows into the United States.   We had aimed to issue this piece last week but it took more work and longer to draw out coherent conclusions than we had anticipated.   The key takeaways we draw out from the analysis in this week’s piece are (1) the structural shifts in capital flows into the US since the Global Financial Crisis and (2) a flows based framework for charting the path of the US dollar.   “Total return has three elements: the interest rate differential, the exchange rate differential, and the ..read more