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We have arrived at our final article of 2021 and, as usual, we thought it would be interesting to revisit our predictions for the past year and come up with a few more heading into 2022.
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Robert Swift takes a look at what happened in October in markets. This is an excerpt from Robert's Global High Conviction report for October 2021. This week we revisit the property market, specifically the potential/future for commercial office space. We are in the process of offering our most recent buy in the Adelaide CBD and throughout the process we have consistently received questions around the prudence and rationale behind taking exposure to the space. In particular, within the broader context of increased tendencies toward work-from-home and falling demand. So, we thought we would address that question rather briefly and why we feel that this question, though warranted, may in fact be somewhat overdone. Last week we looked at energy markets and made the case that the recent price action was a result of broader policy failures in speeding up the transition towards a net-zero world. This week we look at the green energy market to understand the incentives, opportunities and outcomes going forward. The irony may be that our bullish case for medium term oil prices may in fact perversely create a tailwind for the broader sector, despite what this may imply for growth prospects and inflation. This week we take a dive into energy markets, in particular the likely medium to long term outlook for the sector. We have previously written on the potential dislocations both in uranium spot prices (which we wrote off last year) and the potential upward trajectory in oil prices. The former has seemingly played out (though it may still be very much in its infancy) and the second seems to be playing out in real time with Brent futures trading at US$85.45 per barrel and WTI at US$83.73 per barrel. Many would also be aware of the sheer scale of disruptions in the UK and broader shortages of LNG in the Eurozone heading into winter. Even more recently, the headlines have been taken over by blackouts in China in the face of increased demand. Speaking to prospective and actual clients everyday, we get a fair sense and understanding as to the pulse of the market. Throughout those conversations, there are often common themes and questions. Among these, first, should we continue to own equities? Second question, where to allocate in a world of continued low interest rates? Thirdly, we keep hearing about inflation, but what does this actually mean? We now turn our attention to the global ‘Mobility Revolution’, set to be one of the defining investment thematics of the 21st century. An opportunity on par with the introduction of the World Wide Web in the 90s and the rise of mass production in the early 20th century. In doing so a key focus will be on the economics of adoption, the likely winners (both geographically and company wise) as well as, taking a normative stance within the broader context of policy intervention. Robert Swift takes a look at the current situation in China, examining government intervention and the moral issue of investing in China in particular. Our friends at Merricks Capital, an allocation in the TAMIM Credit portfolio, take a look at changing shopping and consumption habits in the wake of COVID-19. An important consideration for anyone with exposure, equities or otherwise, to these sectors. Ahead of his webinar next week (register here), Robert Swift takes a brief look at the state of the world and what it means for the investors out there. Robert Swift takes a look at the current situation around inflation and looks at how we can invest to maintain our spending power in real terms. A must read for those now receiving next to nothing for their bonds and fixed income.
As long-term investors in Taiwan we prefer to look at the investment flows by Taiwanese companies into China as an indicator of the state of relations and not media speculation regarding the prospect for military hostilities. If China were going to invade Taiwan it would have happened years ago. The financial relationship between China and Taiwan is strong and growing. It is that financial relationship which will ultimately guide China and Taiwan to a sensible compromise regarding political differences.
Robert Swift takes a look at the US corporate results season to provide a quick update on corporate America. He has noticed a similarity in the commentary coming out of a lot of big companies; is it worth worrying about or should we listen to the Fed?
We wrote about the need for a U-turn in macro policy thinking recently. It looks like we are getting one; or just as important for market psychology, other investors think we are getting one - a shift that is. Read on to learn what investors should consider in this context.
This week we would like to revisit the topic of asset prices. More specifically, in reference to the latest RBA meetings and the IMF World Economic Outlook. A topic that is particularly important to us in perhaps elucidating whether we are in the beginning of (another?) bull market or in the final stretches of irrational exuberance. Most importantly, what does this mean for your investing going forward?
By now most of the readership, we assume, has heard about the Archegos Capital fiasco. A situation that, last Friday, shook global equity markets. A series of events wiping out close to 50% of the market capitalisation of Discovery, more than 50% of Viacom, 20% off Baidu to name a few, not to mention the fact that it has led to an increased level of volatility in global markets. But, just in case you haven’t and you are an investor who has been scratching his/her head at what has been happening in terms of price action, read on.
Robert Swift takes a look at the shift in language coming from central bankers and finance ministers and, more importantly, the implications for equities and bonds.
Every generation sees certain trends that go beyond the cyclical. Trends that encapsulate a fundamental change to the way things are done. When we say secular growth, we are referring to structural changes taking place in the economy; from e-commerce fundamentally changing the ways in which people shop to QE that has ushered in a decade long growth story in equities, in particular the higher growth names. In this piece we want to put forward a few such trends that are likely to fundamentally shift both the economic and investment landscape over the next ten to twenty years.
This week we would like to take a look at Greensill Capital and its spectacular fall from grace. Its fall, preceded by another yet bigger collapse in the form of German payment processor Wirecard, has raised many questions around the ability of regulators to keep up with changes in modern finance and left the German regulator in a shambolic situation.
Last week Sid Ruttala provided us with a list of things not to worry about, this week he goes the other way and takes a look at a couple of things to keep a eye on given the current market environment.
Robert Swift pens a fictitious memo to Jay Powell, elaborating on his thoughts concerning global monetary policy as it currently stands.
Robert Swift takes a look at what happened in February in markets and touches on some of the adjustments made within his portfolio. This is an excerpt from Robert's Global High Conviction report for February 2021.
Here we are, February of 2021 and it has been an interesting start to the year. For those of you that have read previous articles, you know I have been one of those outliers that has been predicting inflation and the tremendous risks posed by the bond market for a good 18-months. So, in keeping with that theme, I shall try and grapple with the interesting trading action so far. It started with a sell-off in treasuries, followed promptly by a sell-off in equities and precious metals with inflation jitters coming back into the equation.
This week we continue with the thematic of mobility and look at another adjacent category, semiconductors. In particular where we see the market going and why it remains an important aspect to look at especially when one thinks off the EV market. For the more technically apt, please forgive if the following seems a tad layman-like, given that this author's particular forte is economics.
Sometimes you get a piece of good advice early in your career, from someone older, that you respect. You should remember that advice and follow it. One of these is often “never say we told you so; it just irritates”. We’re going to break that rule; in a polite way.
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