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”
Tag Archives: equity
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”
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”
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 EuroContinueContinue reading “May 2019: The Dollar Story and Where Are We in the Cycle?”
EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia
Download PDF: Q12019_LATAM_EMEA_Update A revisit of our investment thesis on emerging markets equities Mexico + (Overweight) Last year Mexican stocks were among the worst performer in the EM universe for two main reasons. First, the domestic economy is experiencing a sharp slowdown from industrial and oil production. Second, the increase in global risk aversion hasContinueContinue reading “EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia”
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 (SeptContinueContinue reading “Lessons from Past Emerging Markets Cycles: Equity”
Putamen Capital: February 2019 Update
Our decision last month to portfolio equity allocation proved to be a correct one, despite our model suggesting a very defensive position. Emerging Markets and U.S. equity rallied on the backdrop of Fed dovishness and signs of reflation coming from China, the largest importer for many EM countries. We still believe that the growth slowdownContinueContinue reading “Putamen Capital: February 2019 Update”
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-havenContinueContinue reading “Putamen Capital: January 2019 Update”
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