Outlook 2022

Like astrologists, investment managers are expected to publish at least once a year theirfinancial forecasts. And similarly to astrologists, they usually oblige and publish a long list ofapparently well-supported predictions. Like astrologists, investment managers are expected to publish at least once a year their financial forecasts. And similarly to astrologists, they usually oblige and publish […]

Health and the Election Year

In these last weeks leading to the US presidential election the actuality is dominated by the highly acrimonious and not unentertaining diatribes between the candidates. According to the polls a Clinton victory seems much likelier than a Trump win. However, as was recently shown by the Brexit vote, elections can always reserve surprises particularly considering […]

Negative Interest Rates Are Spreading Like The Zika Virus

We are opening this quarterly review with this recent quote from legendary bond investor Bill Gross as it addresses what is maybe the most critical financial issue of the time(1). While the first three months of 2016 have largely been characterized by a financial roller coaster in equity markets, commodities and oil we think that […]

Second-half 2021 outlook

The first half of 2021 has proven very favorable to financial markets. This was due to a convergence of three important factors: low interest rates  defendable valuation levels ongoing recovery from the covid crisis The first factor is likely to remain for a long period of time no matter the talk about increases in interest […]

An explosive bubble?

Despite the covid crisis, the stock market is again trading near all-time highs, especially the tech stocks. Valuations are rich, in particular for the NASDAQ which is trading at a price-multiple earnings of 40. When valuations reach levels which are elevated by historic standards, investors get concerned about whether the market is in a “bubble” […]

Gold, dear Gold

Ray Dalio’s optimistic call has recently drawn the attention to gold in view of the strong record of this investor and of his hedge fund Bridgewater Capital. Since the dawn of humanity gold has fascinated man with a universal appeal. It has been the symbol for wealth and prestige. Gold’s attraction has been driven by its […]

Noise and substance

2019 has so far proven another good year for the financial markets. Since the big financial crisis of 2008 markets have moved most of the time up. This is in spite of a macro environment with considerable tensions and headlines which generate renewed market concerns regularly. Chief among those concerns is the trade war between […]

The Yield Curve: Predicting a Recession?

On March 27, 2019 the US Yield Curve inversed. More precisely the spread between the 10- years and the 3-months Treasuries. This event generated many alarming headlines and is significant. The yield curve is one of the most closely followed economic indicators and for good reason. It has historically been one of the best predictors […]

Seeking to generate value in a challenging market

2018 was an exceptionally challenging year for international investors. In some respects it has proven even more challenging than the big financial crisis of 2008. During the financial crisis some asset classes still managed to generate appreciable returns, particularly US Treasuries which benefitted from the “flight to safety”. In 2018 the prices of both equities […]

Between fortune-telling and careful strategic planning

One of the most striking aspects of the global economy is how complex it is and how it is influenced by an immense numbers of parameters which are often not well understood and hardly predictable. Although it incorporates mathematical tools and concepts from the sciences, the field of economics remains very much a social “science”. Trying […]