In Kanbrick's annual letter published on Wednesday, Tracy Britt Cool, a former top lieutenant of Warren Buffett, criticized cryptocurrencies as "digital tulips," echoing concerns about the sustainability and value of digital assets.
The letter, which highlighted Kanbrick's investment strategy, emphasized the importance of focusing on niche companies with moats led by exceptional individuals, rather than attempting to predict the future or rely on macroeconomic factors. The firm aims to deal with uncertainty by maintaining a margin of safety and prioritizing adaptability over perfect forecasting.
In the last year, the market has seen a reversal of the boom times, characterized by costless capital, SPACateers promoting their ventures, and a cacophony of promoters enticing Main Street investors with tokens and meme stocks. Cool expressed relief at the return to more sensible valuations and a decreased emphasis on leverage and financial engineering.However, she also expressed concerns about the impact of easy money, macroeconomic challenges, and distorted incentives on the real economy, particularly in light of rising interest rates. Cool stated that the firm is deeply skeptical of prognosticators and prefers a more prudent approach to risk management.
The letter suggested that the rapid tightening of the Federal Reserve after years of monetary expansion will continue to have unpredictable and likely negative consequences on the broader economy.
Despite these concerns, Cool and Kanbrick remain bullish on America, citing the nation's unique competitive position and resources.