Pries Capital Macroeconomic Framework
Pries Capital’s Macroeconomic Framework where we believe the two most critical variables in any economy are “Growth” and “Inflation.” The level of growth or inflation is not as important as the direction because the economy and asset markets are relative, not static. When we look to forecast the expected future direction of these two variables: “Growth” and “Inflation.” Is the rate of economic growth going to rise or fall? Of the two factors, the direction of real economic growth is more important for asset price performance.
Points of discussion:
• The economy has long-term (secular) trends and shorter-term (cyclical) trends.
• Secular trends are slow-moving and are impacted most closely by demographics and debt.
• Cyclical trends are 6 to 18-month fluctuations in growth and inflation, which occur on top of secular trends that are 3 to 5-years in nature.
• Asset prices respond very closely to the cyclical trends in economic growth and inflation.
• Pries Capital’s Macroeconomic Framework monitors both critical trends and details the probable path forward for asset prices.
Pries Capital is a private equity investment research firm. Pries Capital generates exclusive stock market and real estate investment research for all types of investors. Whether you are an institutional investor or a retail investor, the firm strives to be the first-place investors go to for their quantitative macroeconomic research and financial market strategy.
With that said, "We have great challenges & great opportunities, and with our help we’ll meet them together!" – Jason Pries
-
Passive Investments Effect on Markets
Air Date: December 27, 2021
While you don’t have the luxury of sitting down face-to-face with the passive fund managers, it’s a mistake to believe there’s nothing you can do. By doing your homework, making detailed information easily accessible, and finding ways to indirectly influence passive m...
-
Pries Capital Macroeconomic Framework
Air Date: February 6, 2022
Pries Capital Macroeconomic Framework where we believe the two most critical variables in any economy are “Growth” and “Inflation.” The level of growth or inflation is not as important as the direction because the economy and asset markets are relative, not static. Whe...
-
Economic Growth
Pries Capital’s Economic Growth
Points of discussion:
• Economic growth is an increase in the production of goods and services in an economy.
• Increases in capital goods, labor force, technology, and human capital can all contribute to economic growth.
• Economic growth is commonly measured in ... -
Economic Inflation
Pries Capital’s Economic Inflation
Points of discussion:
• Inflation is the rate at which the value of a currency is falling and, consequently, the general level of prices for goods and services is rising.
• Inflation is sometimes classified into three types: Demand-Pull inflation, Cost-Push inf... -
Factor Coincident Index
Pries Capital’s Factor Coincident Index
Points of discussion:
• Coincident indicator refers to metrics that reflect the contemporaneous condition of the economy.
• Coincident indicators are often used in conjunction with leading and lagging indicators to get a full view of where the economy has ... -
Second Derivative
Pries Capital’s Second Derivative
Points of discussion:
• In broadest terms, it tells you “How quickly the change is changing.”
• The second derivative of the equation will give you the acceleration of the object, that is, the rate of change of speed with respect to time.
• The derivative does e... -
Third Derivative
Pries Capital’s Third Derivative
Points of discussion:
• The third derivative of position represents “jerk,” or the change in acceleration over time.
• The third derivative, or higher derivatives for that matter, are generally used to “improve the accuracy of an approximation to the function.”
•... -
Bottom-Up Economic Environment
Pries Capital’s Bottom-Up Economic Environment
Points of discussion:
• Bottom-Up processing is a form of information processing.
• A Bottom-Up process has the advantage of being more unprejudiced and the outcome can discover new critical factors from the economic environment.
• Our Bottom-Up app... -
Sharpe Ratio
Pries Capital’s Sharpe Ratio
Points of discussion:
• The Sharpe Ratio is used to help investors understand the return of an investment compared to its risk.
• The ratio is the average return earned more than the risk-free rate per unit of volatility or total risk.
• Generally, the greater the va... -
Dispersion
Pries Capital’s Dispersion Model
Points of discussion:
• Dispersion refers to the range of potential outcomes of investments based on historical volatility or returns.
• Dispersion can be measured using alpha and beta, which measure risk-adjusted returns and returns relative to a benchmark index... -
Elements of Market Risk
Pries Capital’s Elements of Market Risk
Points of discussion:
• The Elements of Market Risk is the leading edge of our process for evaluating and proactively positioning for changing market conditions.
• The Elements of Market Risk intramarket analysis is valuable because it often signals a brea... -
Asset Market Backtests
Pries Capital’s Asset Market Backtests
Points of discussion:
• Backtesting assesses the viability of a trading strategy or pricing model by discovering how it would have played out retrospectively using historical data.
• The underlying theory is that any strategy that worked well in the past is... -
Stock Selection Heat Map
Pries Capital’s Stock Selection Heat Map
Points of discussion:
• A heatmap is a graphical representation of data in two-dimension, using colors and box sizes to demonstrate distinct factors.
• Heatmaps are a helpful visual aid for a viewer, enabling the quick dissemination of statistical or data... -
Top-Down Investment Portfolio
Pries Capital’s Top-Down Investment Portfolio
Points of discussion:
• Top-down investing focuses on the macro factors of the economy, such as GDP, before examining micro factors such as specific sectors or companies.
• Top-down investing may produce a more long-term strategic portfolio, while le...
