Capital Allocation Frameworks at a Glance

At FatCat Capital, the objective is not to forecast prices but to understand structure.

Markets are shaped by the interaction between policy, liquidity, positioning, and narrative. 

These forces are rarely linear and often reflexive. The frameworks discussed are designed to make those interactions observable and to impose discipline on interpretation.

Each framework is:

• Grounded in observable data
• Explicit about assumptions
• Clear on what would invalidate the view

They are tools for thinking, not signals for action.

What it addresses
How monetary policy and liquidity conditions propagate through financial markets.

Core question
Is liquidity expanding or contracting at the margin, and how is that transmission affecting risk-taking?

Primary use
To define the macro environment and background conditions in which other risks are taken.

What it addresses
How market positioning, narratives, and price action reinforce one another.

Core question
Where is positioning creating asymmetry, fragility, or amplification beyond fundamentals?

Primary use
To assess vulnerability, crowding, and the potential for nonlinear moves.

What it addresses
How and when markets shift from one macro regime to another.

Core question
Are established relationships breaking down, and is the market still pricing the old regime?

Primary use
To identify periods where risk is most likely to be mispriced during structural change.