Well, I suppose in one sense, since DTC has existed for 50 years, and there have been several major downturns without issues in that regard, there is that solace. Really, though, sweeping asset seizure is not at all legally or even politically possible. In a catastrophic collapse, I would argue the opposite, that the SIPC running out of protection would cause government backstopping it (like it did for the FDIC during Signature/First Republic failures in 2023). That doesn’t mean that there won’t be instances of what is unimaginable happening at times. MF Global's busting customer account segregation rules to try and void collapse in 2011 comes to mind. My point though is other than one offs we deal with; no I do not think it could be intentionally and systemically government driven event. The issue of changing the $100T (yes, that is a ‘T’) DCT system to direct securities ownership is the damage it would do to transaction efficiencies and Wall Street plumbing. I am for a system that can enhance security and protect customers, just not sure if a better one exists at this time.

Clients will receive a more extensive bulletin I wrote this morning on the subject, specifically addressing the two alternative asset managers we own.  But at a high level, I do not believe that illiquid asset classes should be treated as liquid, and I do not believe advisors or investors should pretend liquidity can be extracted from something that is inherently illiquid.  At the same time, I do not think the current sentiment shift is relevant to fundamentals, and ultimately, I think people treating highly nuanced asset classes and investment strategies as monolithic are guilty of a substantial misunderstanding of the space.

Well, when I use the term “Reaganite” or “Reaganism,” I am referring to a loose term to describe traditional conservatism – a Burkean approach that in the 20th century was largely known as the three-legged synthesis of free market defense, social conservatism, and strong national defense (particularly in the context of an anti-Communist ideology in the Cold War). It is often used to contrast traditional conservatism from populism and economic nationalism.

But the term “Reaganomics” is more commonly thought of as the belief in supply-side priorities – using tax cuts and deregulation as incentives to drive more supply-side growth. Reagan’s economic ideology was also strong dollar, it was pro-energy independence, and it advocated for price stability. The 1982 and 1986 tax bills are widely thought of as the two most sweeping tax bills in American history, which reinforced the concept of Laffer’s curve (lower federal tax rates creating a higher amount of federal revenue as marginal tax rate reduction incentivized more growth and productivity).

Some critics say (errantly, in my view) that Reagan was the beneficiary of lucky timing after 1970’s stagflation, and that 1980’s growth would have happened no matter who was there. I find that peculiar. Others believe that reduced marginal tax rates favored high earners and therefore undermined the progressive nature of the tax code. Again, I find that peculiar, and note that the flatter tax rates (passed on a bipartisan basis) drove job growth, wage growth, and lower tax burdens for lower-bracket taxpayers.

The distinction between the two is critical, yes. The ‘E’ (earnings) in the PE ratio in Non-GAAP is neutralized to remove large one-time items that skew things like acquisitions, legal settlements, etc. If you were to stick with GAAP earnings and include those things, it would skew the denominator and cause your PE ratio to reflect more of a ‘yikes’ scenario unfairly. Our investment committee would use our own judgment to ascertain if what was excluded from non-GAAP was indeed transitory, but would otherwise use it as a better normalized valuation metric. Hope that helps, and great question.