Market updates
Every quarter since 2019, Faris Jafar has written directly to client-partners about portfolio positioning, valuation, and the reasoning behind each decision. The full archive is below.
The Federal Reserve is lowering interest rates to address softness in the labor market and taking the view that tariff-related inflation is likely to be transitory. The prospect of lower interest rates in combination with more policy certainty out of…
Read the letterCurrent inflation readings are trending lower and the Federal Reserve is lowering interest rates. Market sentiment improved dramatically during the quarter as trade-war fears eased and attention shifted to government stimulus (via the hotly debated “One…
Read the letterCurrent inflation readings are trending lower and the Federal Reserve is lowering interest rates. Despite the progress on inflation, market sentiment turned negative due to uncertainty around U.S. trade policy, government spending cuts, Artificial…
Read the letterInflation is trending down to the Fed’s target 2% and interest rates are expected to follow lower. Looking into 2025 and beyond, I believe our diversified portfolio of market-leading franchises is well positioned to deliver strong results given the deeply…
Read the letterI’ve had the pleasure of being friends with Faris for many decades. Over this time, I witnessed his impressive professional career, and his personal journey from a young college graduate on Wall Street to the founder of a successful investment firm,…
Read the letterPortfolio performance was driven by inflections in strategic allocations to sectors that I expect will generate multiples-of-money for our Partnership. In September, the Federal Reserve started reducing interest rates as its focus shifts away from stemming…
Read the letterInflation continues to cool while the economy and jobs market are showing signs of stress which will prompt the Federal Reserve to cut interest rates. For the broader equity market, euphoria around Artificial Intelligence (“A.I.”) resulted in extraordinary…
Read the letterEquity markets were buoyed by positive employment and economic data which generally benefited stocks that skew to procyclical sectors. Bond markets (and less cyclical equities) lagged as the stronger economic data, elevated federal government deficit…
Read the letterCooling inflation, lower interest rates, and stable economic data led to an improvement in market sentiment which drove broad-based positive Fund performance in the quarter. I believe our diversified portfolio of market-leading franchises is well…
Read the letterMarket sentiment softened late in the quarter due to three factors contributing to economic recession concerns, all of which are transitory in my view: While the Federal Reserve has paused raising interest rates, U.S. Treasury bonds (and the broader bond…
Read the letterGovernment intervention appears to have addressed concerns related to bank failures and inflation continues to show signs of cooling. While the interest rate-driven headwinds to the economy are unfolding in the near-term, the lower inflation readings…
Read the letterMany of last year’s stock market laggards are rebounding as inflation, interest rates and currency headwinds abate. The real economic impacts of the interest rate hiking cycle have become more pronounced as demonstrated by the widely publicized bank…
Read the letterWhile the volatility in 2022 was disappointing, there is reason for optimism as many of these headwinds are improving. Specifically: A long-term oriented strategy will inevitably face periods of underperformance given the volatility inherent in short-term…
Read the letterThe reasons for downward pressure on global asset values this year remain the same (i.e. inflation, interest rates, recession and the Ukraine/Russia conflict). As long-term investors, our strategy prefers dominant businesses that can scale globally (to…
Read the letterThe second quarter saw a continuation of the broad-based market volatility experienced in the first quarter due to macroeconomic and geopolitical concerns (i.e. inflation, interest rates, recession and the Ukraine/Russia conflict). The confluence of these…
Read the letterA combination of macroeconomic and geopolitical concerns has led to heightened market volatility during the last few months. The short-term selling pressure has been acute particularly in companies exhibiting the characteristics we find most attractive for…
Read the letterOur research continues to show that we are invested in the highest quality franchises that are best positioned to capture a structurally higher proportion of the global economy. We remain focused on our long-term mandate to grow real economic wealth with…
Read the letterBusiness fundamentals of our investments remains exceptional. For the most recent earnings quarter (ending June 30th, 2021), our 22 Long investments collectively reported a record $381 billion of revenue representing +36% growth versus the same quarter in…
Read the letterFundamentally speaking, all of our Long investments reported strong earnings results and their respective management teams are seeing accelerating profit momentum in their businesses. Given the robust fundamental trajectory and long runway for structural…
Read the letterMarket participants are selling growing, high-quality, profitable businesses to chase inferior assets. It’s worth noting that this dynamic is broad-based and industry agnostic. In fact, despite all the attention given to “tech bubbles”, the best performing…
Read the letterOur research suggests that we are invested in the most profound structural growth themes and the most dominant franchises that will capture the majority of cash flow in the global economy. Importantly, given the scalability of wealth, our prudent portfolio…
Read the letterDespite the incessant chaos throughout 2020, our strategy is unchanged and we stay focused on our long-term mandate, specifically: to grow real economic wealth with capital preservation as a primary consideration. While 2020 is certainly an outlier with…
Read the letterWhile the second quarter results appear quiet on the surface, we observed significant underlying volatility as the world attempts to digest the impacts of COVID-19, government-mandated economic shutdown, trade wars, cold wars, potential COVID-19…
Read the letterI hope this letter finds you and your loved ones safe and well. The COVID-19 pandemic has brought human tragedy, a shut-down of economic activity, fear, panic and uncertainty. My thoughts and prayers go out to the families and front-line heroes combating…
Read the letterIt is my pleasure to welcome you to the Jafar Liquid Strategies LP (“JLS”) first annual letter. I’d like to start by saying that I am humbled by the magnitude of your support; your partnership is an honor that has made possible the very writing of this…
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