Superior investment results require that you deviate from the norm. In our monthly Absolute Return Letter (ARL) we share our out-of-the-box macro view of the world and corresponding megatrends. Subscribers get the letter straight to their inbox about 1o times a year.
Boarding the R-Train?
Although some major economies, e.g. Germany, are probably already in recession, the most important of them all, the US, is not, and this month I argue why I don’t think it will happen anytime soon. However, the US economy is about to slow. +5% every quarter is impossible.
The Outlook for 2024-26
We expect global equities to deliver only modestly positive returns over the next three years. Our estimates are not miles from actual returns over the last 122 years. It is only because returns have been so extraordinarily high over the last 35 years that our projected returns look rather uninspiring. The reason? Read on for the answer.
BTRY for Battery
Solid state batteries will soon replace lithium-ion batteries. They are much more environmentally friendly, they will run much longer on a single charge, and the charging time will drop to minutes. Now, that will accelerate the green transition.
How serious is the unfolding Chinese debt crisis?
Things are not exactly going China’s way these days. One incident after the other has led to a virtual collapse of international investments in China, but that could potentially be the more benign outcome of the ongoing Chinese debt crisis. Far worse, a collapse of the Chinese debt supercycle is also looming.
Three Reasons to Moderate Your Optimism
Some investment challenges are virtually set in stone and are next to impossible to address. Take for example the again of the populace at large. That, combined with the fact that we are already somewhat ‘ahead of the curve’ means that returns on most risk assets will most likely be lower in the years to come.
The Return of El Niño
Nearly everyone thinks the last few years have been unusually warm, but the temperature has actually been held down by La Niña – El Niño’s cooling opposite. The bad news is that La Niña has left us now and will soon be replaced by El Niño. This spells much warmer weather later this year and next with some stark implications to follow.
The Return of QE
QE's resurgence seems likely as economic fundamentals are aligning. While inflation is still high, it's declining rapidly, prompting some central banks to take action before it hits 2%. Although QE causes long-term inflation, the imperative to revive the stuttering global economy is immense, indicating favourable times for risk assets.