As we head into year-end, the fundamental backdrop is very strong.
The Fed has resumed easing after holding policy too tight, for too long. And a more dovish Fed regime is coming soon, that will align monetary policy with industrial and fiscal policy (a trifecta of tailwinds).
Productivity is accelerating, led by AI and infrastructure buildout, which should be revealed more broadly next year, across industries (not just tech).
And hot productivity makes the economic pie bigger and should push wages higher, without putting pressure on prices (i.e. real wage growth).
That said, there will be noise and hand-wringing by the media and Wall Street, and the risk of shocks is real, but the Fed has already repositioned itself in a proactive stance to counter liquidity stress.
With the above in mind, our top-down view has been validated this year in our premium portfolio services. Our Billionaires Portfolio is up over 40% on the year. It's a portfolio full of deeply undervalued stocks, with a catalyst for change. And we are just in the early stages of a cycle that favors the portfolio: value over growth.
Our AI-Innovation Portfolio is up close to 100% since our June 2023 inception, and remains positioned in stocks that are (already) or will become cash flow machines, as AI moves from experimentation into deployment, including physical AI (robotics and automation).
If you have been watching from the sidelines, this is a great time to get involved. You can join our Billionaires Portfolio here, and our AI-Innovation Portfolio here.
As things are dialing down for the holidays, I'm unplugging to spend time with my family (some ski time in Colorado!). So this will be my last note for the year.
Thank you for being a loyal reader of my daily Pro Perspectives notes.
Wishing you a Merry Christmas and a Happy New Year!
Best,
Bryan