Anyone buying the Miami Beach 3.25% bonds of 49 is taking massive uncompensated risk.

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Miami could turn into Atlantis.

Generally speaking, most entrepreneurs should have a barbell approach to managing their total wealth.  This requires looking at the entire balance sheet when managing their assets, which I have discussed at length here. Total Wealth Approach In short, a Total Wealth approach considers the business assets and liabilities, as well as

personal real estate and expected cash flows, side by side with financial assets. As a heuristic, entrepreneurs can think of their business interest as a concentrated equity position.  This concentrated equity position typically overwhelms their financial assets in size.  Because of this, the liquid financial assets should be treated…

MMT creates zombie companies that are enabled to drag their dead legs around and gnaw on the capital that should go to corporations that would replace them.

bantam inc jack duval multi family office manhattan nyc uhnw mfo - zombies

Central bank-enabled companies.

This is the third post in a series on Modern Monetary Theory.  The first post introduced the theory, the second critiqued it, and this one explains the investment implications. Buy U.S. Treasury Bonds As discussed in my previous post, MMT is deflationary, not inflationary, so it should lead to lower interest

rates.  I believe the Japanese and EU experiments with monetary stimulus and asset purchases have born this out. Chart 1:  Japanese Stock Market, Government Debt and Central Bank Balance Sheet Source: Bloomberg In the chart above, the Nikkei 225 Index is the white line, the red line is Japanese…

The biggest problem with MMT is that debt is deflationary, not inflationary.

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Robert Mugabe, MMT economist.

This post continues my series on Modern Monetary Theory (“MMT”).  You can find my previous post, where I explained how MMT works, here.  In this post, I critique various parts of MMT theory. “Countries Don’t Go Bankrupt” This idea has been in circulation before.  Indeed, Walter Wriston, the CEO of Citibank, once went all-in

on it.  "Wriston's most remarkable achievement at Citibank was persuading Washington that lending money to governments in developing countries was nearly risk-free."[1]  About these loans, Wriston notoriously said, "They're the best loans I have.  Sovereign nations don't go bankrupt."[2] The truth, as anyone with even a…

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money." Alexis de Tocqueville

bantam inc jack duval MFO UHNW New York - Monopoly money image

The new Benjamin?

For the past six months, Modern Monetary Theory (“MMT”) has been making heads explode all over the blogosphere and in the financial press.  Most of the commentary is from ride-or-die free market capitalists shouting about socialism and the End of Days.  Few seem to have taken the time to know

where MMT comes from or appreciate that (spoiler alert) the Federal Reserve has been practicing MMT for 10 years. Beginnings MMT has a precursor in what is known as Chartalism. The word "Chartalism" has its roots in the Latin word "charta" meaning a token or a ticket.  The term was…

Luck is the residue of design - Branch Rickey.

bantam inc jack duval UHNW MFO Manhattan New York - Branch Rickey

Branch Rickey, one of the all-time great "portfolio" managers.

Our biggest holding, Oaktree Capital Group ("OAK"), announced yesterday that it was being acquired by Brookfield Asset Management ("BAM") for $49 per share in cash or 1.077 BAM shares, at the election of the OAK Class A unitholders.  The position was roughly seven percent of our risk asset portfolio

before the announcement. I'm highlighting this investment in order to discuss our investment process and not to brag about a winner (I've had plenty go the other way). Bantam Investment Process We tend to use diversified ETFs or to recreate them ourselves for increased tax efficiency.  (See this post on Custom…