| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Reams Asset Management's Mark Egan draws parallels between historical March disruptions and the current Iran conflict, emphasizing that prediction is futile and fear-based forecasting leads to missed opportunities. The core thesis centers on exploiting objective investment opportunities rather than speculating on uncertain outcomes. Real rates have risen to cycle highs near 3% after inflation, which the manager finds objectively attractive regardless of future rate direction. Asset prices have become meaningfully cheaper due to geopolitical uncertainty. The manager dismisses common narratives about the Iran situation being inflationary, noting that real rates have risen while long-term inflation expectations remain flat. Key risks include the unpredictable nature of geopolitical events and their market impacts. The positioning strategy focuses on unemotional decision-making based on current valuations and yields rather than forecasting. The manager expresses optimism that this uncertainty creates opportunity for disciplined investors who avoid fear-based positioning and focus on measurable investment metrics.
Focus on objective investment opportunities based on what is known rather than uncertain forecasts, particularly attractive real rates near 3% and cheaper asset prices created by geopolitical uncertainty.
The manager is optimistic about seeing a much better outcome than Julius Caesar and believes clients will be better off despite the current uncertainty.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 3 2026 | 2026 Q1 | - | Iran, opportunity, rates, uncertainty, volatility | - | Reams Asset Management sees the Iran conflict as creating investment opportunity rather than cause for fear. Real rates near 3% are objectively attractive at cycle highs, while asset prices have cheapened meaningfully. The manager emphasizes disciplined positioning based on current valuations rather than unpredictable geopolitical forecasting, expressing optimism about client outcomes. |
| Jan 5 2026 | 2025 Q4 | - | Bonds, Economic Uncertainty, Federal Reserve, monetary policy, rates, volatility | - | Egan argues the Fed's single-variable approach to economic management is flawed reductivism that ignores economic complexity. With limited tools after decades of mismanagement and poor fiscal conditions, he expects continued and worsening market uncertainty. The manager rejects any return to low rates and volatility as wishful thinking while positioning to capitalize on the challenging environment. |
| Oct 3 2025 | 2025 Q3 | - | Caution, positioning, risk management, uncertainty, Valuations | - | Egan takes a defensive stance amid stretched valuations and extreme uncertainty, citing multiple policy risks from Fed independence to Social Security changes. Rather than rushing into investments, he advocates minimizing downside exposure while maximizing ability to profit from negative outcomes, acknowledging that caution is warranted even if uncomfortable for active managers. |
| Jul 3 2025 | 2025 Q2 | - | Defensive Positioning, Market Timing, Policy Volatility, risk management, Trade Policy | - | Following extreme policy-driven volatility in Q2, Egan now sees dangerous complacency with markets at highs amid ongoing policy uncertainty. He advocates defensive positioning - reducing risk and increasing flexibility - to prepare for inevitable future dislocations that will create opportunities, rejecting any return to pre-COVID zero-rate environment. |
| Apr 3 2025 | 2025 Q1 | - | credit, Defensive, liquidity, Valuations, volatility | - | Markets are experiencing overdue reversion to the mean with falling equity prices, widening credit spreads, and rising volatility. Reams maintains high liquidity and defensive positioning given stretched valuations and persistent uncertainty. They expect continued intense volatility and are positioned to deploy capital aggressively when reversion overshoots fair value downward. |
| Jan 4 2025 | 2024 Q4 | - | credit, duration, Fed policy, fixed income, Quality, rates, Valuations | - | Fed has abandoned rules-based policy for feelings-based approach, creating unprecedented uncertainty as rate cuts caused longer rates to rise. Manager advocates above-benchmark duration to capture attractive 2%+ real rates while maintaining significant quality bias given expensive valuations across equities and credit markets amid elevated economic, political, and monetary policy uncertainty. |
| Oct 3 2024 | 2024 Q3 | - | Federal Reserve, Housing, inflation, interest rates, Market Distortions, monetary policy | - | The Fed's decade of zero rates created housing market distortions that made homes unaffordable for millennials while enriching older generations. Markets expect rate cuts to 3% by 2025, but the manager believes the Fed will prove wrong about inflation or economic strength, creating opportunities for contrarian positioning at low cost. |
| Jul 3 2024 | 2024 Q2 | - | credit, duration, Federal Reserve, fixed income, rates, yield curve | - | Fixed income manager maintains above-neutral duration positioning and securitized product exposure while avoiding corporate credit entirely. Despite Fed rate cut delays and inverted yield curve persisting over two years, elevated equity valuations and compressed risk premia warrant caution. Strategic positioning focuses on attractive real rates and securitized valuations while respecting traditional recession indicators that suggest prudence is warranted. |
| Apr 1 2024 | 2023 Q4 | - | credit, duration, Fed policy, fixed income, Mortgage, rates, Treasury | - | Fixed income manager reduced duration to neutral after capitalizing on attractive real yields throughout 2023's volatile Treasury markets. Maintains high-conviction mortgage overweight while trimming corporate credit and non-USD exposure. Key risk identified as potential return to artificially low rates rather than continued inflation. Positioned for tactical flexibility amid expected continued market turbulence in 2024. |
| Oct 3 2023 | 2023 Q3 | - | Federal Reserve, Housing, inflation, interest rates, Market Distortion, monetary policy | - | Egan argues Fed's zero-rate policy created housing market distortions that trapped homeowners and priced out millennials. With markets pricing in 3% rates by 2025, he's positioned contrarian to benefit if the Fed errs on inflation or growth. The housing affordability crisis remains unresolved and potentially destabilizing for the economy. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
RatesReal rates have risen to cycle highs and are objectively attractive at close to 3% after inflation. The manager emphasizes that real rates, not nominal rates, have increased while inflation expectations beyond five years have remained flat or declined. |
Real rates Inflation Yields Fixed income Interest rates |
IranThe Iran war/incursion has created massive uncertainty and generated significant changes in yields, prices, and volatility. The manager notes this event is being characterized as inflationary but argues this is factually incorrect based on real rate movements. |
Geopolitical War Military Conflict Volatility | |
| 2025 Q4 |
RatesThe Federal Reserve's ability to precisely manage inflation rates is questioned as absurd, with Treasury Secretary Scott Bessent suggesting a range approach is more appropriate. The Fed's single-variable model using federal funds rate to manage complex economic variables is criticized as extreme reductivism. The environment of increased uncertainty and limited Fed tools suggests a challenging period ahead with higher rates and volatility. |
Federal Reserve Interest Rates Monetary Policy Inflation Treasury |
VolatilityThe manager expects the environment of increased uncertainty to continue and likely become decidedly worse. The belief that we will return to a period of very low rates and even lower volatility is characterized as wishful thinking. This challenging environment with higher volatility is viewed as an opportunity rather than a threat. |
Market Volatility Uncertainty Risk Management | |
| 2025 Q2 |
Risk AppetiteManager observes excessive greed and unabashed risk taking in markets despite potential dark future full of peril. Advocates reducing risk and increasing flexibility to prepare for future opportunities that volatility will create. |
Volatility Risk Management Positioning Market Timing |
Trade PolicyAdministration's proposed tariff policies were described as absurd and destructive to the global economy. These extreme policies caused market turmoil but ultimately had to stop as they were unsustainable. |
Tariffs Global Economy Policy Risk Market Impact | |
| 2025 Q1 |
VolatilityThe manager expects intense levels of volatility to persist given stretched valuations and uncertain backdrop. Credit spreads have widened and volatility has increased as markets experience reversion to the mean. |
Volatility Credit Stress Risk Appetite |
LiquidityThe fund maintains high levels of liquidity and a defensive stance given the uncertain environment. They are positioned to deploy capital when valuations revert further through fair value. |
Liquidity Capital Markets | |
| 2024 Q4 |
RatesReal rates are well over 2% and high by standards of the last 20+ years. The manager believes these rates are currently attractive and should be captured for a longer than average time frame, indicating duration should be above benchmark levels. |
Duration Yield Curve Real Rates Fixed Income Interest Rates |
QualityGiven expensive valuations across equity, investment grade credit, and high yield credit, coupled with greater than average uncertainty in economic, political, and monetary policy matters, the manager advocates for a significant bias toward quality investments. |
Credit Quality Investment Grade Risk Management Defensive High Quality | |
| 2024 Q3 |
RatesThe Fed's zero-interest rate policy for over a decade created significant market distortions, particularly in housing. The market has priced in rate cuts to around 3% by end of 2025, but the manager believes there's significant probability of an alternative scenario where the Fed proves incorrect about inflation or economic strength. |
Interest Rates Federal Reserve ZIRP Monetary Policy Rate Cuts |
MortgageBy 2022, approximately 70% of the mortgage market had fixed rates below 3.5%. This created a housing lock-in effect where homeowners won't sell due to rate differentials. Available homes for sale fell from 1.235 million in July 2019 to 647 thousand by July 2023, while median prices rose 43% from $276,000 to $397,000. |
Housing Market Mortgage Rates Home Prices Housing Supply Real Estate | |
InflationThe manager is skeptical of the Fed's celebration over putting the inflation genie back in the bottle, believing their policies likely had little to do with the decline in inflation. The Fed's obsession with cutting rates and returning to an undefined neutral rate is viewed as alarming given potential for inflation resurgence. |
Inflation Price Stability Monetary Policy Economic Policy | |
| 2024 Q2 |
RatesThe Federal Reserve's pivot toward rate cuts remains elusive, with the manager cautioning against one-sided optimism about their impact. Despite over two years of rate hikes and an inverted yield curve, equity valuations remain elevated and risk premia are near record lows. The manager maintains an above-neutral duration stance to capitalize on attractive real interest rates. |
Federal Reserve Rate Cuts Duration Yield Curve Monetary Policy |
Credit StressThe manager has rotated away from corporate credit exposure, including zero exposure to high yield, not due to recession expectations but because spread levels have become relatively unattractive on a risk-adjusted basis. This positioning reflects valuation-driven concerns rather than fundamental credit deterioration. |
Corporate Credit High Yield Credit Spreads Risk-Adjusted Returns | |
| 2023 Q4 |
RatesDespite extreme volatility throughout 2023, Treasury rates barely changed year-over-year with the 2-year declining 18 basis points and 10-year unchanged. The manager maintained above-neutral duration for most of 2023 due to attractive real yields reaching levels last seen in 2006/07, but has since reduced duration to neutral heading into 2024 following the sharp Q4 rally and aggressive Fed pivot priced into forward curves. |
Interest Rates Duration Treasury Fed Policy Real Yields |
MortgageThe manager maintains a meaningful overweight to the mortgage sector as a high-conviction position built during 2023. Although the mortgage sector outperformed in the final two months of the year, spreads remain wide and attractive despite the outperformance. |
Mortgage Spreads Sector Allocation Credit Fixed Income | |
| 2023 Q3 |
RatesThe manager discusses the Fed's zero-interest rate policy and its distorting effects on markets, particularly housing. He expresses skepticism about the market's expectation of rates declining to 3% by end of 2025, suggesting the Fed may be incorrect about inflation or economic strength. |
Interest Rates Federal Reserve ZIRP Monetary Policy Rate Cuts |
MortgageThe letter extensively covers how Fed policy created a mortgage market distortion where 70% of mortgages had rates below 3.5% by 2022. This created a housing affordability crisis as rates doubled while home prices rose 43%, trapping existing homeowners and pricing out new buyers. |
Housing Market Mortgage Rates Home Prices Affordability Market Distortion | |
InflationThe manager critiques the Fed's celebration of putting the inflation genie back in the bottle, arguing their policies likely had little to do with the decline in inflation. He suggests the Fed's obsession with cutting rates and returning to a neutral rate is alarming. |
Inflation Federal Reserve Monetary Policy Price Stability |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| No ticker commentary found. | |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
