^{I realise most of you may not know that much about me, so I decided to include a short little origin story below just covering where my obsession with investing came from and why I write.}

^{Don’t worry this isn’t all about me, this will be the last of it and there is plenty of investing advise in the second half of the piece.}

I started properly actively investing in 2015. Looking back, I had absolutely no clue what I was doing, but I was convinced I knew it all. Call it youthful ignorance.

What I lacked in knowledge, I made up for with blind enthusiasm. I traded headlines and invested in every ticker symbol the financial media was peddling. After a few quick wins, I was hooked, convinced that my proprietary blend of google searching and back-of-the-envelope math was enough to beat the market.

18 months later, just when I was convinced I had mastered my craft, XRP and a few ‘YOLO’ trades wiped me out, and I just watched it happen. Turns out, losing the equivalent of your annual wage in a matter of weeks is an eye-opening experience. Here are some of the lessons I still live by.

1. Math is not an edge. Everyone has a calculator

2. Take risk - But size the risk appropriately

3. The market doesn’t award extra points for complexity, sometimes, simple is best.

4. Respect Momentum - Markets are structurally geared towards momentum so don’t fight the trend

5. The cheap can get cheaper

6. Create your own convictions, borrowing other people’s opinions is a recipe for disaster

7. Create a rules-based investment strategy - otherwise, you won’t sleep at night

8. Be risk-on in a statistically defined uptrend. Be risk-off or neutral in a statistically defined downtrend. (A fancy way of saying: let your winners run but manage your stops along the way.)

But the most important lesson of all - Just buying stocks because some random guy on Twitter said it would go up is not a sound investment strategy.

A decade later, I now live in the Cayman Islands working as an investment advisor helping people create an execute on their financial plans. Creating risk-adjusted investment portfolio is a big part of my day job now but the reality is, it’s just about creating clarity for people so they understand what they are doing with their money and why.

Needless to say, my approach has changed over the years. Throw in a couple of thousand hours of research, too many exams and a debilitating obsession with everything investing and that pretty much covers it.

As an ode to a more reckless 25-year-old me, I write to truly create conviction in my own opinions, and hopefully it helps some people along the way.

If you want to learn more about where my love of writing came from, you can read about it on my other blog - here.

Tariffs

I don’t want to go into this too much, as I am sure you have heard 100 different variations of the impending Tariff doom over the week.

My View

Market rumblings suggested that Tariffs would force and inflationary spike, but the tariffs need to be widely implemented for that to take place. Realistically the threat of tariffs is simply a negotiating tool and a strong negotiation tool at that.

The fact that the market is a few percentage points from all-time highs and that Mexico and Canada were quick to negotiate, supports this idea.

Some Thoughts

• I believe the long-term outlook for the economy and the stock market remain favourable, but in the short-run, market volatility is likely to be higher than usual. As JPMorgan’s Michael Feroli wrote on Sunday – “Even if tariffs are called off tomorrow, the increase in policy uncertainty will be hard to put back in the bottle.”

• The key is to focus on consistent, high-quality companies with strong leadership and solid financials. This has always been the focal point. Much of the rest is simply noise.

• I’m not seeing nt. The NTRI leads the actual CPI rental data and came in at the lowest rate of change this cycle, down 2.4% vs Q4 2023. Given how big the shelter component of CPI and PCE is, you’d need a huge offset in some other component to see any significant inflation pressure. Short of an unforeseen energy shock I don’t see inflation meaningfully picking up based on current data.

• Fed will likely hold rates steady until growth weakens/labour markets level off. This will likely lead to reduced expectations for Fed rate cuts and a selloff in short-term US Treasuries, with increased volatility in long-term bonds as they balance expected growth and safe-haven demand. My advice, remain tilted towards short duration and reposition into longer duration assets as opportunities present themselves. Or said differently - every time you see a 10Y Treasury move above 4.8%… fill your pockets.

Thanks for reading

At FigTree, we help build, monitor and ensure you execute your financial plan. And as trusted advisor we will be there to help you overcome any stumbling block you encounter along the way.

I’m always happy to help wherever I can so if you want to learn more, please don’t hesitate to reach out to me at [email protected]

Mike 👋