Monthly April 2020: Peak COVID-19, Counting the Cost of the Lockdown, and Equity Screaming Buy!

Download PDF: Monthly_202004 With the COVID-19 already spreading globally for over two months now and stock market seems to have bottomed, investors are right to ask whether we are at the peak of COVID-19 infection rate. In this article, we discuss where we are in the COVID-19 crisis cycle, the implication on countries’ banking systemContinue reading “Monthly April 2020: Peak COVID-19, Counting the Cost of the Lockdown, and Equity Screaming Buy!”

Checking the Pulse on Global Economy: Strategy for 2020

Download PDF: monthly_201912 Risk aversion has come down of late, as highlighted by the rebound in real yield from a deep negative level in G7 economies ex-Italy. The improving global outlook despite apparent weakness in credit Chinese data, however, is concerning. The less forceful and diminishing stimulus administered by the Chinese government in the lastContinue reading “Checking the Pulse on Global Economy: Strategy for 2020”

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 andContinue reading “July 2019: Recession vs Reflation”

May 2019: The Dollar Story and Where Are We in the Cycle?

Download PDF: Monthly_2019_April The strength of the dollar has dismayed many investors, us included. The weakening growth in the U.S., as measured by final demand component of the GDP, has pointed downward and should lead to a weaker dollar at a time when China is reflating. We still believe that the current improvement in EuroContinue reading “May 2019: The Dollar Story and Where Are We in the Cycle?”

April 2019: Is the Recession in Front or Behind Us?

Download PDF: March19_PC It is tempting to argue that we are currently experiencing the “manufacturing recession”, similar to the “commodity recession” we experienced back in 2011-2012 and 2014-2015. All the data is supporting the thesis that we did have a recession in 2018, albeit a mild one: 1) industrial production and manufacturing PMI weakens inContinue reading “April 2019: Is the Recession in Front or Behind Us?”

Lessons from Past Emerging Markets Cycles: Equity

PDF: Emerging Markets Review A Review of Emerging Markets Equity Performance Emerging markets equity is an inherently volatile asset class, with annual volatility of 17.7% compared to 14.2% for its developed markets counterpart. Investors who were willing to endure the higher risk has been rewarded tremendously in the long run. Between 1988 and today (SeptContinue reading “Lessons from Past Emerging Markets Cycles: Equity”

Putamen Capital: March 2019 Bird Eye View

Four months after Putamen Capital started trading, we continue to build and improve our database, model and quantitative trading strategy to guide our investment decision, with the goal of building an all-weather portfolio that outperform our benchmark (MSCI All Country World Index). This month we introduce an enhanced version of our tactical asset allocation andContinue reading “Putamen Capital: March 2019 Bird Eye View”

Putamen Capital: January 2019 Update

Our strategy last quarter to allocate small portion for equity paid off handsomely. Since we first launched our asset allocation model in October 2018, our model portfolio returned by 1.8% while our benchmark, MSCI ACWI, lost 6.0%. This month, the model recommends increasing the defensiveness of the portfolio by allocating 100% to bonds, a safe-havenContinue reading “Putamen Capital: January 2019 Update”

December 2018: Outlook, Update On Asset Allocation Model and Sector Valuation Overview

Thesis Review, US Treasury and Emerging Markets Prior to discussing our model update and 2019 sector outlook, we want to review our investment thesis from last month (Nov 24th), which has been panning out nicely. In the post we wrote: “In the anticipation of Fed backing-off from rising rates further in 2019, we do believeContinue reading “December 2018: Outlook, Update On Asset Allocation Model and Sector Valuation Overview”

Assessment Of The Current Cycle: Asset Class Selection for Portfolio Construction

Figure 1. World Efficient Frontier (1988 – Nov 1988, except for few asset classes) A teacher of mine once said to me that in order to gain anything in life, investing included, we need to take risk. The amount of risk we are willing and able to face determines the expected gain or progress thatContinue reading “Assessment Of The Current Cycle: Asset Class Selection for Portfolio Construction”