Brian Pretti's Blog

Partner and Chief Investment Officer

Brian has been an investment management professional for over three decades.

Prior to joining Capital Planning Advisors as Partner and Chief Investment Officer, he served as Senior Vice President and Chief Investment Officer for Mechanics Bank Wealth Management since 1990 where he was instrumental in growing assets under management from $150 million to over $1.4 billion.

Brian is a sought after public speaker on the topics of the financial markets and economy, and has been quoted in Barrons, the Financial Times, San Francisco Business Times and Comstock’s.

Prior to his role as CIO at Mechanics Bank, he was an investment research analyst at value equities investment firm George B. Springman, Inc., serving institutional clients such as the State of Oregon, San Francisco City and County Public Retirees, and the Contra Costa Country Retiree Pension Fund from 1986-1990.

From 1983-1986, Brian was a research analyst in the three person headquarters based Financial Planning and Analysis division of Transamerica Corporation.

Brian was the founder, publisher and editor of ContraryInvestor.com, a subscription based investment research website serving institutional, private and retail investors from 1998-2012, and continues to write for numerous well known investment websites such as ZeroHedge and Financial Sense.

Brian holds the Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP®) designations as well as having earned an MBA in Finance from San Francisco State University, a BS in Economics and BA in Business Administration from the University of San Francisco.

While not living his passion for the financial markets and economy, Brian loves spending time with his wife and son, enjoying travelling, hiking, music and seeking out new adventures.

Cause and Effect?

All the chatter from the Fed about interest rate levels, forward guidance, tapering, etc. is largely noise. In a consumption driven economy, wage growth is the accelerant of consumption growth, not rising equity and real estate prices through the illusory "wealth effect".

A Tale of Two Taperings?

Throughout the current economic cycle I have continually referred to the characterization of “the tale of two economies”. Specifically, I have been struck by the dichotomy between the fate and fortunes of large US companies relative to their much smaller business brethren.

Whether It’s the Weather?

Moving into the New Year, hopes for an acceleration in economic activity had been relatively high, especially compared to the sequester challenged early part of the prior year. Of course the very harsh weather across a good part of the US in recent months has...

The Price Is Right Is Speaking Volumes

Everyone is fully aware that the current equity market cycle has been characterized by lack of expanding volume. Is this why the current environment has been described as the rally no one believes? Or the most hated rally in recent memory?

The 5% Solution Revisited

Right now, the S&P is more extended above its 200 week moving average than anything we have experienced since 1999. This is only the fourth time we have seen this type of extension in six decades. No predictions of some imminent demise, rather a “lesson” from direct historical experience.

Dollar Daze

It should be more than apparent to investors in today’s world that both anticipating and staying in harmony with the direction of currencies is crucial in the process of global asset allocation. As we look back at 2013, it seems clear that global central banker actions in large part helped shape investor behavior.

The Real Confidence Indicator?

I’ve written many a time over the past year about the directional dichotomy between the equity market and real economy. To be honest, this is old news. I’m personally convinced that what is most important to financial assets in the current moment is the weight and movement of global capital and the immediate “needs” of various pools of global capital.

The Great Rotation?

Around this time each year the theme of the Great Rotation is dusted off and taken for a spin around the track by financial market pundits far and wide. Of course they are referring to the anticipated movement of capital from the bond market to the stock market.

What’s the Deal With That?

Over the past few years, I’ve written many a time about the fingerprint character differences we are seeing in the current economic and financial market cycle relative to historical experience.

US Housing Recovery: It’s Different This Time (No, Really)

In my bi-weekly missives I usually discuss a topic germane to financial markets. This time around I’m going to throw you a curve ball and discuss the US housing market. We know the mortgage markets and housing itself were very much the locus of excess in the prior cycle and in very good part responsible for the actual economic and financial market downturn.

Estimated Prophet

Over the last six decades, US corporate profits as a percentage of GDP have consistently bottomed in the 4.5-5.5% range in each inevitable recession. There are no exceptions – nine out of nine. We now stand near 11%. Will the next recession cycle, whenever it arrives, be different?

Logging In

A few weeks back I penned a discussion regarding a number of noticeable technical divergences we’re seeing the in current market environment. How these resolve will be important over the short term.

Diverging View Points

Personally, I think even attempting to call a top on this character of an equity market is an exercise in the self-infliction of pain for now. It has been a long time since I’ve seen this type of speculation, but it’s been never since I’ve seen this type of monetary largesse.

The Taper Chase

It is interesting to note that the FOMC commentary with the no taper decision began by citing “tightening financial conditions”. At the time, the stock market was near an all-time high, certainly not a “tight” financial condition.

If You Plant Ice, You're Gonna Harvest Wind

In one sense, the Fed created an ice age for US interest rates by lowering the Fed Funds rate essentially to zero and by printing money to buy US Treasury and mortgage backed securities, putting further downward pressure on longer term interest rates.