Bear/Bull Market
Highlights A clear U-turn in markets could make investors more conscious of losses, making them likely to sell. Hence, the fear-of-missing-out (FOMO) rally could turn into a fear-of-losing-out, or FOLO selloff. The P/E ratio is negatively correlated to the discount rate and the latter is the…
Highlights Recommended Allocation
Quarterly Portfolio Outlook: Cash Injections Versus COVID Infections…
Highlights Should the DXY fail to breach below 92 in the coming months, momentum will be a risk to our short dollar positions. Another risk is valuation. The trade-weighted dollar is expensive, but not overly so. It is not especially expensive versus the euro and some commodity currencies. A…
US Dollar Bear Market…
Highlights The dollar is likely to churn on recent weakness before a cyclical bear market fully unfolds. The reason is that the economic landscape remains fraught with uncertainty, both politically and economically. We continue to recommend a barbell strategy. Hold a basket of the cheapest…
Highlights Please note that we are publishing an analysis on Vietnam below. The unprecedented depth of this recession entails that many businesses will likely be operating below their break-evens for a while, even after the confinement measures are eased. Consequently, the process of…
Feature “People have been asking me whether this is the time to buy. My answer is more nuanced: it’s probably a time to buy.” Howard Marks, Oaktree Capital, Monthly Memo March 2020 Markets have moved dramatically since we published our Monthly Portfolio Update on March 2. Global stocks…
How Long Will The Global Recession Last…
Highlights We spent last week meeting with clients in South Africa, who maintained their equanimity despite the spread of the coronavirus: Maybe it was because there were not yet any reported cases close to home, but investors discussed the global outbreak dispassionately. We repeated our view…
Highlights The coronavirus is a wild card that may have a significant impact on the global economy, … : The COVID-19 outbreak is unfolding in real time, half a world away, and its ultimate course is uncertain. For now, our China strategists think the worst-case scenarios are unlikely, but we…