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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Hoisington Investment Management 2023 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Hoisington Investment Management)

Primary Source Intelligence • Q2 2023 Letter Analysis

Hoisington Investment Management Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Hoisington Investment Management. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"Hoisington sees classic credit crunch developing as real money supply contracts, bank credit turns negative, and real rates surge 7 percentage points."

Executive Summary

Hoisington Investment Management identifies significant economic headwinds in Q2 2023 as monetary and fiscal indicators point toward material U.S. slowdown. Real money supply has contracted for 36 months while velocity remains depressed, creating unprecedented credit crunch conditions. The real Federal funds rate increased 7 percentage points in fifteen months, exceeding tightening cycles before previous recessions. Real bank credit turned negative across all timeframes for the first time during economic expansion. Rising budget deficits from legislation like the Inflation Reduction Act will have contractionary effects due to negative government expenditure multipliers in highly indebted economies. Government debt above 90% of GDP historically reduces trend growth by one-third. Productivity declined at record pace over ten quarters while real wages fell 2.9% annually during expansion. These conditions suggest continued financial cycle tightening with lower inflation and poor economic performance, leading to lower long-term Treasury yields.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

80%

CautiousHigh

High Conviction (80%)

High conviction based on detailed quantitative analysis with specific data points, historical comparisons, and academic research citations. The managers present falsifiable claims with precise metrics and timeframes, demonstrating strong analytical conviction in their economic thesis.

Growth Outlook

15%

BearishBullish

Bearish (15%)

The letter presents a strongly bearish economic outlook, describing classic credit crunch conditions, material economic slowdown, and poor economic performance ahead. Language includes warnings of credit crunch, unprecedented conditions, and significant economic headwinds.

Risk Appetite

0%

DefensiveAggressive

Defensive (0%)

This is an economic commentary document rather than a fund letter, so no portfolio positioning or risk appetite is discussed. The document focuses entirely on macroeconomic analysis without reference to investment positioning.

Capital Deployment

0%

De-riskingDeploying

De-risking (0%)

This is an economic research document rather than a fund letter, so no capital deployment activity is discussed. The document contains no information about portfolio changes, cash levels, or investment positioning.

Forward Guidance

25%

CautiousExpansionary

Cautious (25%)

The forward guidance is explicitly bearish, stating that financial conditions will continue tightening with lower inflation and poor economic performance. The outlook calls for continued decline in long-term Treasury yields based on deteriorating fundamentals.

Language Signal

13%

BearishBullish

Bearish (13%)

Language is dominated by negative terms including credit crunch, contraction, unprecedented decline, record pace decline, material slowdown, poor performance, and significant headwinds. Very few positive or constructive terms are used throughout the analysis.

Perceived Risk

85%

Low RiskElevated

Elevated Risk (85%)

Very high perceived risk with explicit warnings of credit crunch, unprecedented conditions, and material economic slowdown. The managers identify multiple systemic risks including monetary tightening, fiscal constraints, and productivity collapse with detailed analysis of potential negative outcomes.

Opportunity Density

20%

ScarceAbundant

Scarce (20%)

The analysis suggests very limited opportunities as the managers describe deteriorating economic fundamentals across multiple dimensions. The focus on credit crunch conditions and economic slowdown implies a sparse opportunity environment.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Long-term analytical framework evident through multi-decade historical comparisons, references to trends since 1870, and structural analysis of government debt impacts over extended periods. The research approach suggests patient, long-term perspective on economic cycles.