Memorandum #154
Jeff and Ron Muhlenkamp discuss the first quarter of 2025, which saw stable economic indicators like CPI. But significant government policy shifts, particularly in tariffs and regulatory restructuring, have created uncertainty and market volatility. While we are monitoring potential risks like inflation and recession, we remain focused on identifying profitable investment opportunities amidst these changes. Read more of their insights in their current Quarterly Letter. In "Managing Your Portfolio in Uncertain Times," Tony Muhlenkamp discusses how uncertainty in the stock market is constant, making it essential to focus on what you can control rather than attempting to predict the unpredictable. [...]
Letter to My Daughters: On Inflation as a Benchmark
In my last letter,[1] I talked about the various risks you have to contend with as an investor, and that different risks become more or less critical depending on what you are trying to do and the time frame you have for doing it. Now I want to discuss inflation, which I think is the paramount risk you face when trying to accomplish long-term financial goals. There are various definitions of inflation, and different theories about what causes inflation, all of which are interesting and can be useful depending on the situation, the discussion, and the problem you are trying [...]
So Far the 2020’s Don’t Look Like the 2010’s
Portfolio Manager Jeff Muhlenkamp reviews the impact of national and international policies, the state of the US economy, the global economy, and changes in the political environment on investment opportunities. Watch the April 3, 2025, Investment Seminar recording. The opinions expressed are those of Muhlenkamp & Co. and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Is It Time To Play It Safe?
In a recent Bloomberg article, our portfolio manager, Jeff Muhlenkamp, summed up the current state of financial markets saying, “You’re going from an environment where everybody was certain to an environment where nobody is certain, and in and of itself that will impact the market.” As we’ve always maintained, financial markets hate uncertainty. Investors worldwide have recently shifted to a “risk-off” mindset—meaning they’re prioritizing safety over chasing big gains. This is foundational thinking at Muhlenkamp. Think of it like swapping an aggressive rollercoaster ride for a sturdy umbrella in a storm. Over the past few weeks, many have sold the [...]
Thoughts On: Managing your Portfolio in Uncertain Times
I’ve been paying attention to the stock market for over 30 years, and I can’t remember any times that weren’t uncertain. I checked with Ron, who has been paying attention since 1968, and he can’t remember any times of certainty either. When I think about managing your investment portfolio in uncertain times, I start with these questions: What is uncertain today? What has been uncertain in the past? Were these unprecedented at the time? How did you manage your portfolio then? What did you learn from that? For example, the 1970’s were unprecedented in having high inflation combined with high [...]
Free Economies and Free Trade
Tariffs have become a popular subject of discussion since President Trump was elected in November 2024, and some of that discussion is somewhat absurd. We think it is helpful to look past the headlines to some concepts we first introduced in 1992 with an article titled “How We Benefit from Free Trade.”[1] People benefit from a free economy with a large free-trade zone. A free economy is a volunteer economy in which the consumer is king, and no person (or company) can make you buy his or her product. The consumer drives free economies to benefit the consumer, and the [...]
Letter to My Daughters: On Investment Risk
Most conversations about investing start with the question, “How much risk can you handle?” which I think is a very good question. But few people take the time to define the term “risk,” and so they wind up making assumptions that may or may not be true. There are all kinds of risks in life, and there are different risks associated with investing money, but I’m going to focus on just three of them: The chances of losing my money, How much and how often the price of a security goes up and down, The probability of losing purchasing power [...]
Memorandum #153
Jeff and Ron Muhlenkamp discuss ongoing inflation and modest but steady GDP growth. In 2024 stock markets mirrored 2023, with AI-related tech companies driving growth, while long-term bonds yielded little. Read more of their insights and look ahead to 2025 in their Quarterly Letter. In the article "The 6 Ps of Financial Happiness," Tony Muhlenkamp explores the relationship between financial success and client happiness in investment management. Making clients happy is crucial for retaining them long enough to generate financial returns. The key lesson is that financial happiness, like life happiness, is the investor’s own responsibility—it requires discipline, planning, and [...]
Five Tax-Smart Investing Strategies for 2025
Tax-smart investing is a dynamic and ongoing process. You can keep more of your hard-earned money by leveraging tax-advantaged accounts, prioritizing tax-efficient investments, and staying proactive about ever-changing tax laws. As 2025 unfolds, make it the year you take your tax strategy to the next level—because it’s not just about what you earn; it’s about what you keep after tax. Here are five strategies that help to maximize what you keep when it’s time to pay Uncle Sam. 1. Maximize Tax-Advantaged Accounts Tax-advantaged accounts remain a cornerstone of intelligent investing. These include: 401(k)s, IRAs, and Roth IRAs: Contribute the maximum [...]
Thoughts On: The 6 Ps of Financial Happiness
We all know that the job of a money manager is to make people money. As difficult as that can be, the job of the client service manager is even harder. Client service has to make people happy. You might think that if you make people money, then they will be happy; but, I have learned you have to make people happy first so they can stick around long enough for you to make them money. It is a classic “which comes first, the chicken or the egg” dilemma. If I don’t make them happy, then I can’t make them [...]