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.

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.

Counting Cards

As in blackjack, when the bulk of the face cards have been played, the odds of “winning” with successive hands decreases. Ed Thorp would suggest we reduce position (bet) sizing. Of course one way to bring more players and new capital to the table is to increase the payout rate.

Chomolungma

In Tibet, the Sherpa’s call it Chomolungma. In China it is referred to as Zhumulangma. In Nepal it is sometimes called Sagarmatha. You know it as Mount Everest. For many years I’ve been enamored of recantations of Everest summit attempts.

Spread Out

For Three Stooges aficionados (this is where Gen X’ers and Gen Y’s can tune out if they so choose), you’ll remember that every time the Stooges physically bunched up a bit too much in one of their routines, Moe Howard would yell out, “spread out!”

Oh Behave, Mr. Bond

To suggest we have encountered heightened volatility in the bond market as of late is quite the understatement. Although Treasury yields had been increasing in front of the mid-June Bernanke speech, they have continued to run to the upside post the commentary without a whole lot of retracement up to this point.

Getting Into Rarified Air?

You may have noticed that recently released NYSE margin debt data showed us a month over month decline. Taken as a singular data point, pretty darn meaningless. But set against the context of QE III and the current 2009 equity market cycle to date, its worthy of at least recognition and discussion.

Financial Sense Wealth Management: Invest With Us
Subscribe to Financial Sense Newshour on iTunes
randomness