Letters to investors

Executive Summary The Eurozone is entering Q4 2025 with clearer signs of cyclical improvement. Composite PMIs have firmed above 52, supported by a steady recovery in real disposable income and a turning inventory cycle. GDP is now tracking 0.4–0.5% QoQ, well above the ECB’s earlier expectations. Monetary policy remains in “wait-and-watch” mode: the ECB is firmly on hold at a 2.00% deposit rate, with a high bar for further action. Inflation is close to target, labour markets remain resilient, and financial conditions are stable. Italy’s macro picture remains slower-moving. Confidence data show a gradual but uneven improvement: consumer sentiment is inching back, construction remains historically strong, but manufacturing continues to struggle with global overcapacity and the post-Superbonus drag. Domestic demand is improving, but overall GDP… Read more

There’s a growing anxiety among market participants about where we stand in the economic cycle. The question keeps surfacing—what stage are we in, and what comes next? Yet any clear-cut answer is increasingly elusive. The conventional business cycle framework—relying on output, inflation, and employment—is proving inadequate. Since 2008, and especially after the COVID shock, policy distortions and geopolitical dislocations have severed the link between traditional macro indicators and market outcomes. To access the full content, head over to 20Quant website www.20quant.eu Best regards, — Federico Polese This document is the intellectual property of 20Quant and Simplify Partners. Subscribe here: PRICING | 20QuantGet free Turbulence Index alerts: turbulence-index-alerts —

Executive Summary Context & Framing Four Early Wins (as presented) How the Program Operates Politics, Risks, and What Could Break Macro & Growth Backdrop (as presented) Investor Takeaways Selected Lines (attribution to the event) Reforms “stick” only if people believe politicians are honest.” “Argentina is the most stable country in the world” — leadership of unions and corporates unchanged for decades. The “Bermuda Triangle” where the economy drowns: unions + corporates + Peronist party. “Reduction of expenses is very expansionary” — by shrinking the inflation tax. Reform “is like skiing with one ski… what counts is pointing in the right direction.” For further information, please contact us at info@simplifypartners.com Best regards, — Federico Polese This document is the exclusive property of Simplify Partners SA. Subscribe… Read more

In our a March 2025 newsletter (Link), we anticipated this moment: stock picking is making a comeback. 2025’s volatility has reawakened interest in active selection, and we’ve responded by launching a subscription service at 20Quant — on top of implementing this strategy, as usual, within the Simplify Partners funds — giving investors direct access to thematic and ad hoc single-name portfolios curated by the advisory team. After nearly a decade of outflows, stock-pickers have seen a resurgence in 2025. Amid market turbulence, they posted strong gains, attracting over $10 billion in fresh capital in the first half of the year according to Bloomberg data. This reversal follows years where the strategy was overshadowed by passive ETFs and giant multi-manager platforms. Market dislocations around US… Read more

In asset management – and especially when you’re in a leadership position like CEO or founder – one of the paradoxes is that you can feel surprisingly alone. Despite being immersed in meetings, video calls, and constant interaction, the real weight of strategic decisions is often shouldered alone. This solitude makes the role of community crucial. Not necessarily a close circle of friends, but a broader network of peers and acquaintances who understand what you’re facing. It’s through these connections that advice, perspective, and sometimes even courage emerge. Meeting smart, grounded people is easier than we think – if we actively seek them out. Whether offline or online, it’s about placing yourself in the right environments. Online communities, in particular, can offer powerful support…. Read more

Despite the market’s resilience and the return to a “quiet” Turbulence regime, the SPX DeMark setup now flashes tactical caution. Sequential and Combo ‘13’ sell signals on the S&P 500 suggest potential trend exhaustion, but with no VIX backwardation to trigger contrarian risk-on sentiment, a wait-and-see posture is prudent. All eyes on next week’s confirmation window. This kind of multi-factor insight is part of our research at www.20quant.eu now available by subscription. Market Breakdown SPX DeMark Indicators The S&P 500 chart displays both a Sequential and Combo 13 sell signal completed in early June, suggesting trend exhaustion. Importantly, we are still within the 12-bar window in which a reversal should occur for the signal to remain valid. Price action has softened modestly since, failing… Read more

This issue compares the traditional Volatility Index (VIX) with the Turbulence Index (TI), emphasizing why the latter offers a structurally richer signal for portfolio risk management. While the VIX gauges expected volatility, the Turbulence Index measures statistical unusualness—accounting not only for magnitude shifts but also for breakdowns in asset correlations. The distinction is non-trivial. In crises, correlation behavior changes before volatility spikes. This newsletter outlines the academic foundations, empirical validation, and practical advantages of TI over VIX for modern portfolio construction. The Conceptual Gap: Why VIX Isn’t Enough The VIX, widely interpreted as the “fear gauge,” reflects the market’s consensus on future volatility. Yet its scope is univariate: it focuses exclusively on the magnitude of expected price fluctuations, neglecting how assets behave in relation… Read more

The U.S. moves toward taxing foreign capital — and it’s not just about politics The “One Big Beautiful Bill” (OBBB), recently passed in the U.S. House and now pending Senate review, contains a little-known clause — Section 899 — that could have disproportionate market consequences. While its political message is loud, its financial implications may speak even louder: a structurally weaker dollar and a reassessment of U.S. asset exposure by global investors. From Tariffs on Goods to Tariffs on Capital Section 899 introduces a framework for taxing passive income (such as dividends or interest) earned by foreign investors in U.S. assets — but only if those investors are based in jurisdictions that Washington deems “discriminatory” toward the U.S. (i.e., countries with digital services taxes… Read more

20-Year Total Return Comparison (2003–2023) Over the past two decades, Berkshire Hathaway’s stock performance has roughly matched the S&P 500’s total return. From 2003 through 2023, Berkshire Hathaway (BRK) delivered about a 10.5% compounded annual gain (approximately +644% cumulative), slightly trailing the S&P 500’s 11.1% annualized total return (about +720% cumulative). In other words, an investment in the S&P 500 (with dividends reinvested) marginally outpaced an equal investment in Berkshire over this 20-year span. 2003–2007: BRK surged in the mid-2000s (e.g. +29% in 2007 vs S&P’s +5%) after lagging during the early-2000s tech bubble bust. 2008–2009: Both suffered in the financial crisis (BRK –32% in 2008 vs S&P –37%), with similar ~–50% peak drawdowns, though Berkshire recovered more slowly in 2009 (only +2% vs… Read more

Despite a significant -9% depreciation since January, the U.S. dollar appears poised for further downside. While short-term technical signals may hint at a tactical bounce, deeper structural imbalances suggest the longer-term path remains lower. Historical overvaluation, shifting global portfolios, and weakening U.S. growth prospects all conspire against a sustained dollar recovery. The overvaluation legacy Historical context offers a sobering lens. According to Federal Reserve data, the dollar remains nearly two standard deviations above its real effective exchange rate average since 1973. Only two other periods—mid-1980s and early 2000s—saw similar excesses. In both cases, the dollar subsequently fell by 25–30%. The current setup, while not a crystal ball, bears unmistakable resemblance. Portfolio rebalancing: the quiet giant The scale of global exposure to U.S. assets is… Read more