The Red-Headed Stepchildren That Could Generate Trillions In Wealth

Trump Broke Pax Americana, Leaving Few Silver Linings But a Once-In-A-Generation Stock-Picking Opportunity In Biotech

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Table of Contents

• Trump Broke Pax Americana, Leaving Few Silver Lini …

• Three Things To Know Before We Go…

• And one more thing… Gold continues to shine

With volatility and uncertainty still riding high as a result of the Trump administration’s ongoing trade war, Porter is turning the Daily Journal over to Erez Kalir today. Though he leads Porter & Co.’s Biotech Frontiers, Erez has vast knowledge of the broader markets and years of experience with some of the best minds in finance… including working directly for Julian H. Robertson at Tiger Management during the Global Financial Crisis.

Here’s Erez…

For a time during my years as a hedge-fund manager, I had a ticket to one of the most exclusive clubs on Wall Street. It wasn’t officially a club. Instead, it was an informal roundtable convened by one of Wall Street’s “grand old men,” a former U.S. Treasury Secretary who had also run one of Wall Street’s most storied banks. 

The group met every month or two, and its invited speakers were financial titans or senior government officials at the center of the action. I was generally the youngest attendee by at least two decades and had the smallest trading account by many zeroes. I tried my best to stay invisible at these meetings and simply soak up the worldly wisdom provided by the masters gathered there.

One of the most memorable meetings of this roundtable featured a senior government official who had led the Treasury Department’s response to the Global Financial Crisis in 2008-09. I’ll never forget what he shared about his daily routine during that time. He’d get to his office every day at around 5 a.m. and, first thing, fire up his Bloomberg Terminal to check the prices of global benchmarks. 

The numbers on a Bloomberg Terminal are color-coded: Green means the price is going up, red means it’s moving down. Day after day during the financial crisis, this official would launch his Bloomberg before dawn and observe a sea of red numbers – showing that stocks and equity futures around the world were selling off. But in that sea of red, one number remained consistently green: The 10-year U.S. Treasury note.

As the senior official recounted to our roundtable, “I knew that no matter how much blood there was in the equity markets, so long as the U.S. long bond stayed green, we’d be fine. I lived in fear of a morning when I’d come in and see the 10-year Treasury red alongside equities. Thankfully, that morning never came.”