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Income and Wealth Dispartity Commentary from Marketfield and Appledseed Funds

edited January 2014 in Fund Discussions
Very Interesting commentary from these two funds.

They both blame Easy Fed policies. While Marketfield manager believe inflation will make situation worse for less affluent, Appleseed managers are very dire in predictions:
1. We expect to see higher tax rates on high income earners and higher tax rates on capital gains, gifts, estates, and
2. Trade protectionism should rise, so that demand from U.S. consumers can be more easily served by domestic
3. With stronger trade protections in place, the labor movement could experience a resurgence in the U.S.
4. The financial sector likely will decline as a percentage of GDP, driven by higher interest rates and structural
industry reforms.
5. The dollar likely will be devalued further in order to reduce the burden of debtors.
6. Legislation likely will be passed and executive orders likely will be issued which would make it easier for
consumers to restructure their household debts.
7. As the Federal government spends more money to protect the poor and service debt, spending in other areas will
likely be cut. "

Portfolio Positions
Appleseed - "We are similarly underweight companies that market consumer
discretionary products to high income consumers."

Marketfield -Those that have catered to luxury class, have done super well. They don't say if they believe it will continue.

FWIW, don't count out the luxury class. It is inconceivable that they would allow their taxes to go up because of "lazy" people.

Appleseed Shareholder Letter, 10/25/2013 end of year letter final.pdf


  • Appleseed's had over a sixth of their portfolio in gold this past year. Everyone makes mistakes of course, but I think it is real hard to get this kind of political/macro call right. I prefer funds that do bottom-up stockpicking.

    Anyone, this is just personal and political so probably does not belong on this site, but at least a few of those predictions don't sound too dire to me.
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