Superior investment results require that you deviate from the norm. In our monthly Absolute Return Letter we discuss key macro topics. Subscribers get it straight to their inbox about 1o times a year.
The truth about Brexit
UK politicians are not telling the full truth about Brexit. Why? Most likely because it is not in their interest to do so. UK exports to the EU are far more important to the UK economy than vice versa, and a substantial number of UK jobs could be at risk, should the free trade agreement go up in smoke. And that is only one of several issues our political leaders are concealing.
A Note on Inflation: Is it here or isn’t it?
Is inflation finally coming back? There are certainly signs that it is – at least in some countries – and it appears that both central bankers and investors have already picked up the early signs. We argue why investors should worry more about the US and UK and less about the Eurozone, where higher inflation more recently is all non-core. Across Europe, in the longer term, we believe deflation is still a much bigger risk than inflation.
Who Really Knows? An Open Letter to Howard Marks
This month’s Absolute Return Letter is a follow-up to last month’s letter. In January I argued why investors could be facing a much more hostile Fed this year than generally perceived, and this month we look at the implications of that; why beta risk should be de-emphasised in 2017, and where we spot better opportunities.
Hiccup of the year?
As we always do in January, we focus on the investment minefield laid out in front of us, and we argue that, with upcoming elections in the Netherlands, France and Germany, this year could turn into a rather tricky one for investors. That said, there are plenty of other things to worry about.
A lesson in microeconomics – how to get the economy going again
There is macroeconomics, and there is microeconomics. Macroeconomics have failed miserably in recent years, and it is time to approach things differently. If you can find ways to stimulate demand more than supply, you will almost certainly see a re-acceleration in economic growth.
Trump – another Brexit moment?
We are now only about a week away from finding out if the Americans are about to have their own Brexit moment – a president nobody thought stood a chance only a short while ago with all the consequences that implies. The anti-establishment emotions in the US are no less pronounced than they were in the UK leading up to the EU referendum, so anything is possible. Even if Hilary Clinton wins, as most expect her to, the road in front of us is not at all straightforward.
The New Normal, Mk.II
Even if you rarely or never read the Absolute Return Letter, I urge you to read this one. In short, it is about economic growth and why GDP growth continues to disappoint. I argue that it doesn’t, but that we calculate GDP incorrectly. I am not walking away from my long held view that slowing GDP growth is down to adverse demographics, but this clearly also plays a role.
Increase Returns at No Added Risk
The frustration level amongst investors is rising, as returns on most asset classes continue to disappoint and we tune in on thinking outside the box. Other than allocating your capital differently, is there anything else you can do to raise overall return levels? The short answer is yes, and that is what this month’s letter is about.