Category Mental Models

The Ellis Framework: Why Real PCE is the “Seeing Around Corners” Metric for Market Cycles The Ellis Framework: Why Real PCE is the “Seeing Around Corners” Metric for Market Cycles

The Ellis Framework: Why Real PCE is the “Seeing Around Corners” Metric for Market Cycles

Headline indicators suggest economic resilience, but underlying data reveals structural cracks. While personal consumption remains high, it is increasingly fueled by government transfers rather than private wages. With real spending outpacing income and pending home sales plunging 9.3%, Real PCE serves as a critical leading indicator of an approaching market downturn

INVESTCON 5: Trimming Growth and the Calculus of Value INVESTCON 5: Trimming Growth and the Calculus of Value

INVESTCON 5: Trimming Growth and the Calculus of Value

Howard Marks reminds us, true success lies in understanding the critical difference between price and value. Price is what you pay for an asset—a number driven by market sentiment, optimism, and fear. Value, on the other hand, is what you get—an asset's inherent worth based on its ability to generate future cash flows. While markets may act as a voting machine in the short term, pushing prices to extremes, they behave like a weighing machine over the long run, eventually reflecting true value. By focusing on value over price, investors can avoid costly mistakes.

The Freediver Test: How to Spot a False Market Breakout The Freediver Test: How to Spot a False Market Breakout

The Freediver Test: How to Spot a False Market Breakout

The labor market is clearly slowing. The "stag" in stagflation is here - what's less clear is the "flation" component. With respect to growth - we see slowing in housing, consumer spending and now job creation. The payrolls data was nothing shy of a disaster. And whilst the headlines will report on the dismal 73,000 jobs added (well below the ~140K job additions expected) - the massive 258,000 negative revisions over May and June is cause for concern.