On bad predictions in 2017…

You see, many forecasts made by the media at the beginning of 2017 were ultimately proved wrong. The Trump
administration, as volatile as it may be, was not synonymous with stock market volatility. Equally surprising to
some, bonds performed better than expectations and inflation was largely kept in check. We’re not here to hand out
“Fake News Awards” like President Trump, but we’d be remiss to not acknowledge the misses by many pundits over
the past year. We’d be equally misguided to buy too deeply into such surface-level posturing in 2018.


On our refusal to make a market “call”…

Truthfully, in times like these we find solace in our approach—frustrating as it may be to readers. There’s something
comforting in answering questions about the next 12 months with a calculated and informed vagueness. At Narwhal,
we’re at a cozy cross-section between knowledgeable and non-committal when it comes to a market call for 2018 and
that’s not new positioning. We’re happy to be in that spot. That’s home for us.


A potential bull market case…

If you want a case for a bull market, we can give you that. Did you know that practically everyone—the U.S., Europe,
China, Russia, etc.—bested estimates for GDP growth last year? Did you hear about these corporate tax cuts? That
money has to go somewhere, right? Government spending could spur the economy through infrastructure and all of
this should trickle down to consumer spending. This is all good stuff and it could all come into play.


A potential bear market case…

Want to be a bear? We don’t blame you; you’re overdue! Corporations have used cheap access to cash to buy back
stock and accomplish very little since the financial crisis so why would they actually deploy cash from a tax cut now?
Isn’t that upside—if there is any—already priced in? Expectations have risen for the economy as a whole and
represent a higher bar than in years past. Further, bullishness by some sentiment measures (like Investor’s
Intelligence) is approaching highs not seen since 1987.


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