Download PDF: Brazil and South Africa Update Brazil’s economy is slowing, but positive development on pension reform has charged the market of late. Much of the positive development has been priced in and the risk of further slowdown in the economy is rising. Brazilian stocks are not cheap relative to EM overall, currently at itsContinueContinue reading “Update on Brazil and South Africa”
Author Archives: Journeyman
August 2019: The Long View, Turkey and Revisiting This Year Investment Thesis
Read in PDF: Monthly 201908 As bond yields continue to stumble globally, we expect that more SWF and pension fund will divert allocation from fixed income to both public and private equity, which would be a boon for the deepening of stock market globally. Holding developed countries’ government bond is a sure way of losingContinueContinue reading “August 2019: The Long View, Turkey and Revisiting This Year Investment Thesis”
Market Timing Strategies in Emerging Markets Portfolio
Download PDF: Market Timing Strategy of Emerging Markets Portfolio Despite the recent volatility from the trade war and deterioration in global growth, from a valuation perspective, however, EM stocks remain cheap compared to its historical averages and relative to DM equities. Since around 2012, as the earnings generation capability of EM stocks declined, investors haveContinueContinue reading “Market Timing Strategies in Emerging Markets Portfolio”
July 2019: Recession vs Reflation
Download PDF: Monthly_201907 “For months investors have been concerned about potential recession in the U.S., yet the stock market is at all time high. How could we reconcile these developments?”, asked one my friend who is working at an asset management company. The effects from reflationary effort from China has yet to be seen andContinueContinue reading “July 2019: Recession vs Reflation”
An Overview of Russia: Oil, External Risk and The Banking Sector
Download PDF: The Linkage between Oil Price and The Russian Economy There is little sign that Russian economy is diversifying from energy production and exports in the last 20 years. The direct link and trickle-down effect of higher/lower oil prices to the economy result in an economy that is highly correlated with the global economicContinueContinue reading “An Overview of Russia: Oil, External Risk and The Banking Sector”
Lessons from Past Equity Market Responses During Periods of High Inflation
Download PDF: Market Responses During Periods of High Inflation Recent crisis in Argentina and Turkey have left me wonder, why does equity markets in local currency terms always corrects during periods of high inflation although in the medium-term corporates are able to maintain their margin through gradual increase of price of their products? My logicContinueContinue reading “Lessons from Past Equity Market Responses During Periods of High Inflation”
June 2019: Searching For The Tipping Point
Download PDF: Monthly_201906 Theme 1: Long Selected Undervalued Countries and Short U.S. Equities. This week U.S. PMI data shows a significant slowdown in the expansion of U.S. economy (manufacturing PMI 50.6 in May 2019 from 56 in the beginning of the year), raising the odds of undershoot of earnings forecast of U.S equities and theContinueContinue reading “June 2019: Searching For The Tipping Point”
Chile: A Case of Investor’s Complacency?
Download PDF: Chile Research Chile has enjoyed a developed economy status over the years, but its growth profile is still hugely cyclical due to dependency on copper export. The country is suffering from twin deficit due to weakness in copper prices and the government’s fiscal condition is deteriorating, albeit at a still very healthy level.ContinueContinue reading “Chile: A Case of Investor’s Complacency?”
The Case for Underweighting U.S. Equity
And a Once in a Decade Opportunity to Overweight EM Equity In the last decade, Emerging Markets equity performance has been lagging its U.S. counterparts by a significant 50% margin. Undoubtedly, part of this is contributed by the gain of = hot technology stocks in the U.S. (FAANG). However, currently U.S. earnings growth is peakingContinueContinue reading “The Case for Underweighting U.S. Equity”
Qualitative Screening on Countries Equity Valuation
In this post we highlight several countries equity market and their valuation that we found to be attractive to go long. The countries covered are Brazil, Canada, Germany, UK, Japan, Korea, Mexico, Russia, Turkey and the US. From a cycle point of view, Brazilian equity is in a tough spot. We expect the economy toContinueContinue reading “Qualitative Screening on Countries Equity Valuation”
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