Grey Value Management

08/27/2026

08/27/2026

Per the recent Bloomberg article by Olivia Fishlow, "the limited appetite to exit suggests that investors may be making peace with lower-than-promised returns, rather than taking an immediate hit to their holdings."

However, 𝘄𝗵𝗮𝘁 𝗶𝗳 𝘁𝗵𝗲 𝗼𝘂𝘁𝗰𝗼𝗺𝗲 𝘁𝗵𝗲𝘆'𝗿𝗲 𝗱𝗲𝗹𝗮𝘆𝗶𝗻𝗴 𝗶𝘀𝗻'𝘁 𝗹𝗼𝘄𝗲𝗿-𝘁𝗵𝗮𝗻-𝗽𝗿𝗼𝗺𝗶𝘀𝗲𝗱 𝗿𝗲𝘁𝘂𝗿𝗻𝘀, 𝗯𝘂𝘁 𝗽𝗲𝗿𝗺𝗮𝗻𝗲𝗻𝘁 𝗹𝗼𝘀𝘀𝗲𝘀?

They may not want to take the immediate hit, but in how many cases will their first loss wind up being their best loss?

08/26/2026

Again...

Interest rates may be rising, but they're not skyrocketing, they're 𝙣𝙤𝙧𝙢𝙖𝙡𝙞𝙯𝙞𝙣𝙜.

If interest rates this low cause fiscal and market conniptions, the problem isn't the interest rate level...

08/24/2026

𝗪𝗵𝗮𝘁'𝘀 𝗡𝗼𝘁 𝗡𝗼𝗿𝗺𝗮𝗹?

Are mortgage rates abnormally high?

At about 6.6%, the rate on a 30-year mortgage may be 𝘩𝘪𝘨𝘩𝘦𝘳 than it has recently been, but it is by no means high relative to our recent history (1st chart).

Total public debt exceeding $40 TN is abnormally high.

A federal budget deficit of $2.1 TN in fiscal year 2026 is abnormally high.

A trade war with your closest allies (and neighbors) is certainly abnormal.

But not current mortgage rates.

As the effects of all of the above (and other factors) begin to push interest rates higher, lifting mortgage rates with them, owning a home will become further out of reach for the average American.

But 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗼𝗱𝗱𝘀 𝘁𝗵𝗮𝘁, 𝗮 𝗳𝗲𝘄 𝘆𝗲𝗮𝗿𝘀 𝗳𝗿𝗼𝗺 𝗻𝗼𝘄, 𝘄𝗲 𝘄𝗶𝘀𝗵 𝘄𝗲 𝗰𝗼𝘂𝗹𝗱 𝗿𝗲𝘁𝘂𝗿𝗻 𝘁𝗼 𝗼𝘂𝗿 𝗰𝘂𝗿𝗿𝗲𝗻𝘁 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗰𝗶𝗿𝗰𝘂𝗺𝘀𝘁𝗮𝗻𝗰𝗲𝘀?

08/16/2026

𝗔𝗰𝘁𝗶𝘃𝗲𝗹𝘆 𝗨𝗻𝗱𝗲𝗿𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗶𝗻𝗴

Over the decade through June, just 13% of active large-cap funds outperformed their benchmarks.

As Jack Pitcher discusses in his The Wall Street Journal article, investment pros are saying that AI disruption has created a stock picker’s market.

But they're still struggling to pick the right ones.

Active equity mutual funds have had outflows every year consistently since 2015.

But active managers argue that higher interest rates have ended the cheap-money tide that lifted all boats, just as AI is set to mint huge winners and losers, making security selection crucial.

𝗖𝗼𝗻𝗱𝗶𝘁𝗶𝗼𝗻𝘀 𝗺𝗮𝘆 𝗳𝗮𝘃𝗼𝗿 𝗮𝗰𝘁𝗶𝘃𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴, 𝗯𝘂𝘁 𝗺𝗼𝘀𝘁 𝗮𝗰𝘁𝗶𝘃𝗲 𝗺𝗮𝗻𝗮𝗴𝗲𝗿𝘀 𝗮𝗿𝗲 𝘂𝗻𝗰𝗼𝗺𝗳𝗼𝗿𝘁𝗮𝗯𝗹𝗲 𝗺𝗮𝗸𝗶𝗻𝗴 𝗰𝗼𝗻𝗰𝗲𝗻𝘁𝗿𝗮𝘁𝗲𝗱 𝗯𝗲𝘁𝘀. 𝗜𝘁'𝘀 "𝘁𝗼𝗼 𝗿𝗶𝘀𝗸𝘆."

But to state the obvious,

𝗧𝗵𝗲 𝗼𝗻𝗹𝘆 𝗿𝗲𝗮𝘀𝗼𝗻 𝘁𝗼 𝗽𝗮𝘆 𝗮𝗰𝘁𝗶𝘃𝗲 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗳𝗲𝗲𝘀 𝗶𝘀 𝗶𝗻 𝗿𝗲𝘁𝘂𝗿𝗻 𝗳𝗼𝗿 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝘁𝗵𝗮𝘁 𝘁𝗮𝗸𝗲𝘀 𝗿𝗶𝘀𝗸 𝗮𝗻𝗱 𝘀𝗸𝗶𝗹𝗹 𝘁𝗼 𝗮𝗰𝗵𝗶𝗲𝘃𝗲.

Beta is free, but alpha must be earned.

08/11/2026

𝙉𝙤 𝙀𝙭𝙞𝙩?

In a market environment where public equity valuations are surfing all-time highs, "𝗽𝗿𝗶𝘃𝗮𝘁𝗲 𝗲𝗾𝘂𝗶𝘁𝘆 𝗳𝗶𝗿𝗺𝘀 𝗮𝗿𝗲 𝘂𝗻𝗮𝗯𝗹𝗲 𝘁𝗼 𝗲𝘅𝗶𝘁 𝗮 𝗴𝗿𝗼𝘄𝗶𝗻𝗴 𝗻𝘂𝗺𝗯𝗲𝗿 𝗼𝗳 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 𝗮𝘁 𝘃𝗮𝗹𝘂𝗲𝘀 𝘁𝗵𝗲𝗶𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗿𝗲𝗾𝘂𝗶𝗿𝗲."

If you can't get a sufficiently attractive valuation when public equity valuations are 𝘵𝘩𝘪𝘴 𝘩𝘪𝘨𝘩, something is financially out of synch.

08/06/2026

𝗖𝗼𝗻𝗰𝗲𝗻𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗠𝗼𝗺𝗲𝗻𝘁𝘂𝗺, 𝗔𝗱 𝗡𝗮𝘂𝘀𝗲𝘂𝗺

Jon Sindreu recently did a great piece for Reuters Breakingviews on the impact of risk concentration on valuation in the equity markets (link below).

More than half of the S&P 500's market capitalization is represented by companies driving the AI wave.

Korea and Taiwan, central to the tech supply chain, account for 51% of the MSCI Emerging Markets index.

This has nurtured a 𝗴𝗶𝗮𝗻𝘁 𝘁𝗿𝗲𝗻𝗱 𝗼𝗳 𝗯𝘂𝘆𝗶𝗻𝗴 𝘀𝘁𝗼𝗰𝗸𝘀 𝘁𝗵𝗮𝘁 𝗮𝗿𝗲 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗴𝗼𝗶𝗻𝗴 𝘂𝗽.

The MSCI USA Momentum index outperformed broader equities to an unprecedented extent between March and June, and has now plummeted just as quickly (see below).

Yet 𝗮 𝗹𝗼𝘁 𝗼𝗳 𝗶𝘁 𝗿𝗲𝗳𝗹𝗲𝗰𝘁𝘀 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗿𝗼𝘁𝗮𝘁𝗶𝗻𝗴 𝘁𝗵𝗲𝗶𝗿 𝗺𝗼𝗻𝗲𝘆 𝘄𝗶𝘁𝗵𝗶𝗻 𝗮 ‌𝗰𝗹𝗼𝘀𝗲𝗱 𝗰𝗶𝗿𝗰𝘂𝗶𝘁 ⁠𝗼𝗳 𝗵𝘆𝗽𝗲𝗿𝘀𝗰𝗮𝗹𝗲𝗿𝘀, 𝗰𝗵𝗶𝗽𝗺𝗮𝗸𝗲𝗿𝘀 𝗮𝗻𝗱 𝘀𝗲𝗿𝘃𝗲𝗿 𝗳𝗮𝗿𝗺𝗲𝗿𝘀, which are furiously competing to spend as much as possible in the hopes that all of them will simultaneously make good on the investment.

Investors aren't blind to this risk: the Nasdaq 100 trades at a lower multiple of its constituents’ earnings than it did at the start of the year.

It’s just that valuations in the rest of the world and among lower-growth "value" stocks are also flat or lower. Neither benefited from the recent outflow from AI themes, suggesting that 𝗶𝘁'𝘀 𝗺𝗼𝘀𝘁 𝗼𝗳 ⁠𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝘁𝗲𝗰𝗵, 𝘁𝗵𝗮𝘁 𝗵𝗮𝘀 𝗵𝗶𝘁 𝗮 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗰𝗲𝗶𝗹𝗶𝗻𝗴.

Read the full article, it's very good:
https://www.breakingviews.com/columns/considered-view/theres-no-escape-ai-whipsaw-2026-07-31/

08/05/2026

𝗥𝗲𝗺𝗲𝗺𝗯𝗲𝗿 𝗪𝗵𝗲𝗻 𝗕𝗲𝘁𝘁𝗶𝗻𝗴 𝗼𝗻 𝗡𝗼𝘃𝗼 𝗡𝗼𝗿𝗱𝗶𝘀𝗸 𝗪𝗮𝘀 𝗮 "𝗡𝗼-𝗕𝗿𝗮𝗶𝗻𝗲𝗿"?

GLP-1 was undeniably transformative science.

But here's the thing:

𝗨𝗻𝗱𝗲𝗻𝗶𝗮𝗯𝗹𝘆 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝘃𝗲 𝘁𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝘆 𝗶𝘀 𝗻𝗼 𝗴𝘂𝗮𝗿𝗮𝗻𝘁𝗲𝗲 𝗼𝗳 𝗽𝗿𝗼𝗳𝗶𝘁𝘀. 𝗜𝗻 𝗳𝗮𝗰𝘁, 𝗺𝗼𝗿𝗲 𝗼𝗳𝘁𝗲𝗻 𝘁𝗵𝗮𝗻 𝗻𝗼𝘁, 𝗶𝘁 𝗹𝗲𝗮𝗱𝘀 𝘁𝗼 𝗹𝗼𝘀𝘀𝗲𝘀.

Why?

It seems counterintuitive, but whether it was railroads, aviation, electricity, the internet, or (prospectively) AI, 𝘁𝗲𝗰𝗵 𝘁𝗵𝗮𝘁 𝗶𝘀 𝘁𝗿𝘂𝗹𝘆 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝘃𝗲 𝗶𝗻𝗲𝘃𝗶𝘁𝗮𝗯𝗹𝘆 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝘀 𝗮𝗻 𝗲𝘅𝗰𝗲𝘀𝘀 𝗼𝗳 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝙥𝙧𝙚𝙘𝙞𝙨𝙚𝙡𝙮 𝙗𝙚𝙘𝙖𝙪𝙨𝙚 𝙞𝙩'𝙨 𝙪𝙣𝙙𝙚𝙣𝙞𝙖𝙗𝙡𝙮 𝙧𝙚𝙫𝙤𝙡𝙪𝙩𝙞𝙤𝙣𝙖𝙧𝙮.

Excess capital drives competition and excess capacity, which leads to losses when the supply ultimately exceeds demand.

𝗖𝗮𝗿𝗲𝗳𝘂𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝘁𝗿𝘆 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱 𝗰𝗼𝗻𝗳𝘂𝘀𝗶𝗻𝗴 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗿𝗲𝘁𝘂𝗿𝗻𝘀.

$SPCX

07/23/2026

𝗗𝗶𝗿𝗲 𝗦𝘁𝗿𝗮𝗶𝘁𝘀

Bloomberg journalist John Authers has posted a really good two-minute video explaining the significance of Iran’s attempt to add a threat to blockade the Bab el-Mandeb passage to the Red Sea to its ongoing campaign to halt traffic in the Strait of Hormuz:

https://www.youtube.com/shorts/LGLdxo51VE4

‌

is leaning on its allies in to try closing off...

07/10/2026

“𝗧𝗵𝗲𝘆’𝗿𝗲 𝗿𝗲𝗮𝗹𝗹𝘆 𝗴𝗼𝗼𝗱 𝗮𝘁 𝘀𝗼𝗺𝗲𝘁𝗵𝗶𝗻𝗴 𝘁𝗵𝗮𝘁 𝗶𝘀 𝗴𝗼𝗶𝗻𝗴 𝗼𝘂𝘁 𝗼𝗳 𝗳𝗮𝘀𝗵𝗶𝗼𝗻 𝗳𝗮𝘀𝘁."

As the author writes:

The long-term dilemma for Volkswagen and other German automakers is that their complete mastery of internal combustion engine technology does not count for much in a global market that is racing toward electrification.

Read Keith Bradsher's excellent The New York Times article here: https://www.nytimes.com/2026/07/10/business/volkswagen-china-problems-restructuring.html